When we started Baikal, we had two choices about who to lend to first: build a broad consumer book — phones, household goods, small cash loans — or focus narrowly on one productive asset and learn how to underwrite it properly.
We picked the bike, and we'd pick it again.
The unit economics are simple, but the leverage is real
A boda rider without their own bike pays roughly UGX 30,000 a day to rent one. A rider who owns the bike keeps that money. Over a month, the difference between renting and owning is the difference between scraping by and supporting a family.
Multiply by 750 active borrowers — our portfolio today — and the aggregate income shift across Kampala is real, measurable, and durable in a way that very few microfinance products can claim.
Why the asset matters more than the borrower
The unfair advantage of asset-backed lending is that the asset itself is part of the underwriting. A bike's GPS tracker tells us when a rider is working. The route data tells us where the rider operates. The bike's residual value — even an EV battery a year in — gives us a recovery option that unsecured lenders simply don't have.
That doesn't mean we ignore the borrower. We still want to see a guarantor, verify a stage, and check the CRB. But the asset turns lending from a leap of faith into a portfolio with a real recovery curve.
What we won't do
We won't lend to riders who don't actually ride. We won't finance a bike that can't be tracked. And we won't write a loan we can't service on our weekly mobile-money collection rails.
That discipline is the only reason we're scaling — and the only reason we'll still be here in five years to lend to the next generation of riders.