For a little over a year, Mogo has been issuing loans in the Republic of Kenya, and starting from today, will also offer these loans for investments on Mintos. Mogo Kenya offers to earn annual returns of up to 13% with car loans listed in € (EUR) on Mintos.
For a limited time, Mogo will offer up to 16% interest rate for its car loans issued in Kenya. This offer is valid until the end of 2020.
About Mogo in Kenya
Mogo Finance recognized a niche underserved by the existing market traditional lenders and in 2019 founded a subsidiary of its group in Kenya. Kenya is one of the fastest growing economies in Sub-Saharan Africa1, a country with an established democratic political regime, and a growing transportation sector with approximately 30 thousand vehicles being registered per month2.
In Kenya, Mogo offers financing for a wide variety of types of transport, most notable segments being cars and motorcycles. Car loans are provided to both prospective (leasing) and existing (sale-leaseback) car owners that wish to take a loan against their car as collateral. Mogo Kenya will start its offering on Mintos with car loans.
The lending company reports a thorough process in assessing the technical condition and market value of the cars. Loan-to-value (LTV) ratio is calculated to ensure there is sufficient coverage by collateral in case the loan goes into default.
Mogo Kenya operates a financial technology service that constitutes what is known as “productive lending”. Productive lending services clients are self-employed or small business owners. Typical clients include entrepreneurs that are willing to take out a working capital loan against their cars as collateral or drivers in taxi and ride-hailing business. At the same time, the collateral, being an income-generating asset, serves as the source of funds for loan repayment ensuring low default rates. Thus, Mogo shares it is its mission to fill the funding gap and contribute to the empowerment of local entrepreneurs as well as financial inclusion throughout the region.
Mogo Kenya cooperates with local banks to issue loans and collect borrowers’ repayments, as well as the company offers its clients a popular local mobile payment solution – MPESA, a service for instant money transfers, which makes up over 80% of all collections.
Mogo Kenya business risk is mitigated by having GPS trackers installed in all the cars financed, as well as the majority of cars are insured. All the procedures including GPS tracker installation and location monitoring are performed in-house. The use of proprietary IT systems, the global know-how of Mogo Group, and the specialization exclusively in car financing allows Mogo Kenya to achieve impressive results in loan issuance turnaround time without compromising rigorous underwriting standards.
Mogo Kenya on Mintos
| Annual interest rate | Up to 13% |
| Average loan amount | € 3 500 |
| Average loan term | 40 months |
| Average LTV | 60% |
| Skin in the game | 5% |
| Buyback obligation | Yes |
| Mintos Risk Score | 7 |
Mogo Kenya issued loans are offered as car loans on Mintos marketplace. The lending company is evaluated to have a Mintos Risk Score of 7, with the subscores of 8 (Loan portfolio performance), 5 (Loan servicer efficiency), 6 (Buyback strength) and 5 (Cooperation structure).
How to invest in Mogo loans issued in Kenya
Loans issued by Mogo in Kenya will be added to the Diversified strategy. If you want to invest in these loans with a custom automated strategy, make sure to adjust your strategy settings. If you’re investing manually, you can filter the loans on the Primary Market.
Mogo Kenya loans come with a buyback obligation and Mogo also provides its group guarantee.
About Mogo Finance and Mogo Kenya
Mogo Group was founded in 2012 in Latvia and joined the Mintos marketplace in 2015, originally offering loans for investment from Latvia. Since then, Mogo Group’s presence on the marketplace has grown substantially and now places loans on the marketplace from 14 countries in the Baltics and Central, Eastern and South-Eastern Europe. Operating regions also include the Near East, the Caucasus and Central Asia as well as Eastern Africa. Up to date, the company has issued over € 585 million worth of secured loans and run a net loan and used car rental portfolio of over € 192 million.
Mogo Kenya (Mogo Auto Ltd) is a fast-growing specialist lender in Kenya in the sector of vehicle financing. Since the launch of operations in Kenya, Mogo has disbursed a total of 7 000 loans with a net amount of current portfolio € 8.7 million (data as of October 2020). Part of the car loans portfolio’s repayment have a condition to be set in USD which limits the currency exchange rate risk for Mogo Kenya. In recent months, the majority of newly issued car loans have this condition which implies even less potential impact from currency exchange rate fluctuations in the future.
Some of the equity investors in Mogo Group and Mintos overlap.
