First published 16 Nov, 2025
The electric bike repayment trap no one wants to explain
Image | Pixbay
Electric bikes are pitched as a clean break from petrol life. For the Kenyan market, a customer pays a small deposit, rides home on a quiet machine, charges cheaply and clears the balance from daily trips. This matters because transport costs take a large share of income for people who work with two or three wheelers. The idea feels fair at first but once you look at the credit structure behind these bikes, it becomes a repayment system that many riders take up without grasping the full financial implications.
A rider doesn’t need much to get one because they pay KES 10000 ($77) as a deposit to get the keys, while a financing partner covers the rest and collects about KES 450 ($3.5) each day for 18 months.
The number looks small, and many riders whom I have spoken to over the last 12 months see it as the price of moving into a future where charging replaces fuel. The framing works because daily payments feel lighter than monthly payments. It’s the same way people accept daily or weekly app subscriptions without thinking too hard about the total. But KES 450 a day is about KES 13500 ($104) a month, and that sits right up against the earnings of many delivery riders who juggle unpredictable work patterns.
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The bigger issue sits in the cost of falling behind because some lenders apply interest at 40% per day. Riders focus on the extra KES 180 ($1.39) on a missed instalment, which seems manageable. But that small number masks the rate. For instance, if a rider lets two or three missed days pile up, the debt spreads across the rest of the month, and a few weeks later, the growth becomes difficult to reverse.
If a customer stays in default for two months, they can end up owing more than the bike is worth. The lender can still repossess it because the loan agreement allows it. The rider walks away with debt and no tools to earn, which raises the question of whether this is asset financing or something closer to shylocking.
EV firms run dashboards that track every bike in real time, and lenders plug into that system. So, when a rider falls behind, the lender asks the EV company to lock the bike. A locked bike cannot move, and a bike that cannot move cannot earn. That single feature restructures a rider’s priorities, where the loan moves to the top of the list, ahead of rent, food, school needs or a medical bill.
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Remember, electric bike startups build around two main models. The swapping model gives riders access to battery stations where they drop an empty unit and pick up a charged one. In this setup, the firm controls the energy supply, the repayment rhythm and the enforcement, and also creates a loop that keeps riders entirely tied to the network.
The home-charging model is flexible because riders plug in at home and avoid queues at swapping points. They control their schedule and pay less for each charge, but this removes one enforcement point, so the lender depends heavily on remote locks. In return, the credit terms can be stricter because the lender carries more perceived exposure. Home charging offers freedom on the energy side but leaves the finance side unchanged. The bike may cost less to run, but the loan still operates on a tight daily rhythm.
Across both models, the pitch leans heavily on running costs. The argument is that electricity is cheaper than petrol, meaning over time, the rider saves money. That part is true for riders who secure steady work and predictable daily trips. The problem, however, is that income for delivery riders swings in ways these loans do not. Riders wait long periods at bus stops, and often, demand shifts across neighbourhoods.
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This mismatch between variable income and fixed daily payments is the core issue because it transfers all the volatility to the rider. The reason lenders can accept this structure is the lockout feature, since they do not need to absorb risk in the same way as a bank that waits for monthly payments without direct control over the borrower’s tools. Here, the collateral can be switched off with one command, and the rider carries the uncertainty.
Local EV startups rarely publish the data that would reveal the real picture. I would want to know how many bikes get locked each month. I would want to know what share of borrowers fall behind at least once. I would want to understand the total cost when you add penalties. I would want to know how many kilometres riders must ride daily to stay on track. I want repossession numbers. These should be standard disclosures for any asset-financing model, but remain absent.
This silence matters because it blocks informed debate. Without numbers, the story clings to its hopeful version of clean bikes, lower running costs and improved livelihoods (allegedly). But the unspoken version runs on tight credit loops, enforcement tech and riders who absorb the entire downside. The model works best when riders never miss a day, but real life does not look like that.
This tension sits at the heart of the current push to electrify two-wheel transport. It does not make the idea bad. Rather, it just means the story is incomplete without the numbers.
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Kenn Abuya
Senior Reporter, .
Feel free to email kenn[at]bigcabal.com, with your thoughts about this edition of NextWave. Or just click reply to share your thoughts and feedback.
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