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Twenty-five-year-old Fred Wakoli, like roughly 10,000 other men in Uganda's capital city, makes his living driving a motorcycle taxi.
Drivers often work at least six days a week and 12 hours a day to take home around $30 a week. Scratching out a living is made tougher by the fact that most drivers never manage to own their own motorcycle, known as a boda boda.
"If you are riding for the boss, then the money is for the boss," Wakoli said. "But if you are riding for yourself, then the money is yours."
In January, Wakoli joined a small but growing number of drivers who have managed to break the cycle with the assistance of a company called Own Your Own Boda, the brainchild of 25-year-old
Denver native Michael Wilkerson.
While many Ugandan boda boda drivers pay about $20 to $24 a week to rent a motorcycle, OYOB clients pay about $28 a week for 16 months and walk away with the registration papers.
A little more than two years after Wilkerson and a friend dipped their toes in the water, OYOB is already giving drivers some financial independence while turning a profit. The company has more than 50 bikes on the road, with ambitious plans to expand.
Wilkerson, a 2005 graduate of Denver East High School, recently learned that he'll spend six weeks in Boulder this summer as an Unreasonable Institute Fellow. The institute provides mentoring and funding opportunities for companies that the organizers believe can "change the world." Twenty-six companies were selected from this year's 300 applicants.
Unreasonable Institute co-founder Tyler Hartung said the judges were impressed with Wilkerson's humility as well as the company's track record and potential for growth.
"The fact that there's literally a waiting list of people wanting to take out a loan and all they need is capital to finance more loans is a huge validation from the outside that this is a successful idea," Hartung said.
Although Wilkerson didn't know it at the time, the seeds for this venture were first planted the summer after his freshman year at Stanford University when he accepted an internship in Kampala. While taking boda bodas to get around, he eventually became a loyal customer of Ssuna Mohammed "Medie" Sebi. The two became friends and stayed in touch after Wilkerson returned to school.
Sebi eventually found a regular customer who loaned him the money to buy a motorcycle. After paying off the loan, he sold the bike, bought his mother a piece of land, built her a home and eventually got a loan for another motorcycle.
When Wilkerson learned of the deal, he realized there was room to make both a difference and a profit. With some money they were looking to invest, Wilkerson and friend Matt Brown decided to buy a few motorcycles and struck rent-to-own deals with some of Sebi's friends. They started to think of it as a "real business" in March 2010 and incorporated the following October.
The fact that Wilkerson hatched the idea based on things he learned while living in Uganda is one of keys to the company's success, Hartung said.
"He's not just trying to drop a solution into the market," he said. "He's got an intimate knowledge of the market."
Vijay Mahajan, a University of Texas business professor and author of "Africa Rising: How 900 Million Consumers Offer More Than You Think," agreed that local knowledge is crucial.
"If you're going to do business in Africa, you have to go there and understand your customers well," he said.
The concept behind the company isn't new, but OYOB's ambitious plans for growth sets it apart. Because the venture is risky, most people who loan money to a boda boda driver do so with somebody with whom they've established a relationship. The collateral can easily be wrecked or stolen, and insurance companies won't offer comprehensive insurance if the motorcycle is to be used as a boda boda.
"Everybody we talked to said, 'You guys are crazy,' " Wilkerson said.
Although they acknowledge the risks, Wilkerson and his partners, who include Sebi, Brown and Andrew Mwenda, have sought to find ways to minimize them. Drivers are thoroughly screened and generally need somebody to have vouched for them. Drivers pay dues to belong to a "stage," where they typically wait for customers. If the company is considering making somebody a loan, Sebi will make an unannounced visit to the stage to talk to the stage chairman and fellow riders.
There has been a learning curve. One of the first five motorcycles had to be permanently repossessed for nonpayment and another was temporarily impounded. And both drivers were people Wilkerson knew and had wanted to help out.
"What we've learned is that, unfortunately, the people who may need a bike the most are not always the best clients," Wilkerson said. "Just wanting to help people isn't enough. You have to want to help people who want to help themselves."
Another early hiccup was that the contract each driver signed stated that a motorcycle could be repossessed if a rider missed payments for two consecutive weeks. The idea was to give drivers a little leeway in case of illness or injury, but the assumption was that they'd want to pay off their loans quickly so they could save on interest and own their motorcycle as soon as possible. Instead, drivers immediately began paying every other week. Weekly collections picked up after a new contract was introduced but remain at about 70 percent in a typical week.
Sixteen drivers have paid off their bikes. Among them is 30-year-old Peter Ochieng, who rented a motorcycle for six years prior to signing up with OYOB. The father of two has owned his motorcycle since June.
"It used to be very tough for me, but now at least I can pay school fees and I can save some money," Ochieng said.
As for Fred Wakoli, he has plans to become "the boss." He hopes to rent his recently paid-off bike to his brother and take out a loan to buy another for himself.
By Steve Collins: The Denver Post
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