Boda Boda Business Plan

Boda Boda Business Plan

Boda Boda Business Plan Overview

The Boda Boda Business Plan refers to the business of ferrying passengers from one point to other using motorcycles.
The Boda Boda Business has grown almost geometrically since 2007.

The Bigger Picture

As of December 2013 there was an estimated 800,000 registered motorcycles in Kenya. In
2005 there were 3,759. Then in 2008 the government zero rated motorcycles below 250cc in
2008 and in 2009 the number jumped to 91,151 motorcycles.

Between January and September 2013 there were 109,153 new motorcycles registrations. This
was about 35,000 more than the number registered over a similar period in 2012.

Kenya’s annual demand for motorcycles rose from 16,293 units in 2007 to 140,215 in 2011
before dropping to 125,058 in 2013. An average of 11,000 new motorcycles are registered
every month since 2012.

Second hand motor cycles go for as little as Kshs.30,000 while new models start from as low as
Kshs.60,000 There are also traders, politicians, banks and microfinance institutions availing
finance to youth groups for purchase of motorcycles . A large percentage of riders also don’t
bother looking for driving licenses.

The Boda Boda Business has moved from rural areas where it started to urban centers where motorcycles
are on their way to rival vehicles in numbers.

Other Indicators of Boda Boda Business
Honda Motor Company has set up a local assembly line with a capacity of 25,000 units per
year, and which started operating in December 2013.

Car and General which had been importing and distributing TVS motorcycles from India, and
Suzuki parts from Japan set up an assembly factory in Nakuru with a capacity of 70,000 units.
In December 2013 Toyota Kenya introduced a scheme called Crux Finance which enables more
motorcycle riders to own motorcycles by pooling in resources. Toyota through its Yamaha
division provides the motorcycles which are then paid for through a daily remittance of
Kshs.300.
Negative Policy trends

For long the Boda boda business had been much unregulated with the authorities keeping off.
However with the coming of the county governments, and increased accidents blamed on the
riders there are now more efforts to control the business.
Many county authorities are trying to formulate ways to regulate the boda boda. This is by
increased taxes, zoning which restricts operators to certain areas only and hours of operation.

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