Gozem Receives $10m From IFC to Finance 6,000 Vehicles in Togo and Benin

According to Gozem, a Francophone Africa-focused smart app, 12 million motor vehicle drivers work in informal markets across West and Central Africa.

But there’s a catch: these drivers can’t have their automobiles financed through traditional banks or microfinance companies.

Instead, many turn to payday lenders, who demand exorbitant interest rates—some as high as 70% yearly.

Gozem, a company that offers a variety of mobility, e-commerce, and financial services to drivers, retailers, and other consumers, revealed on Friday that it has teamed up with the International Financial Commission (IFC) to help drivers overcome these challenges.

The IFC has committed $10 million to Gozem’s auto finance scheme. Gozem will be able to provide inexpensive automobile financing in its operating areas of Togo and Benin as a result of this investment.

This agreement comes six months after Gozem completed a $5 million funding round and 14 months after the company began its vehicle lending service. According to the company, it has already assisted over 2,000 drivers in obtaining vehicles with inexpensive financing. This new cooperation will provide funding for 6,000 additional drivers to purchase new automobiles.

“We are excited that IFC has placed their trust in Gozem to be at the forefront of offering affordable financing solutions to these underprivileged regions,” Gregory Costamagna, co-founder and co-CEO of Gozem, said in a statement.

Unlike banks, who demand credit history, asset collateral, or guarantors before giving loans, or third-party lenders, which charge exorbitant interest rates, Gozem just uses data that is already available on its platform. The company delivers this service by calculating drivers’ credit worthiness using its “advanced” KYC procedure, financial and behavioral data, such as the number of trips completed using its app—which can be accessed in minutes. This eliminates the need for drivers to keep track of their bank statements and records; Gozem knows how much they earn and how long it will take them to pay their bills just by using the app to get riders and gigs.

According to a statement issued to TechCabal by Gozem, they will also collaborate with the IFC over the next year to test electric bikes in motovehicle operating conditions and “create a green battery-swapping station network in Togo and Benin to demonstrate electric motorcycles can save drivers money.”

IFC is initiating a pilot investment to assess the impact and scalability of this strategy, according to Gozem’s Raphael Dana, Costamagna’s counterpart as co-founder and co-CEO. Based on the results of the pilot, IFC will double down.

He went on to say that this alliance also considers electric automobiles (EV). “For our EV pilot phase, we’ve set aside 10% of the investment.” “We have a dedicated team working on our electric vehicle aspirations, and we need to make sure the bikes, battery swapping, economic units, and other things function at scale,” he said.

The experiment will “verify electric bikes and that their adoption at scale would not only reduce greenhouse gas emissions significantly, but will also help drivers save money through lower energy and maintenance expenses,” according to the company’s statement.

“Electric vehicles have the ability to say,” says the author. EVs have the potential to “change the moto-taxi sector in West and Central Africa by cutting carbon emissions and lowering operating costs for drivers,” according to Aliou Maiga, IFC’s Regional Director for West and Central Africa. She claims that by teaming up with Gozem, they will be able to “provide inexpensive and green financing solutions for moto-taxi drivers to switch to electric bikes.”

“We believe that IFC’s investment in these underserved regions would inspire other investors and expedite poverty reduction and greenhouse gas emissions reduction in these markets,” she added.

Recently, there has been a substantial increase in access funding projects. Asaak partnered with Untapped Global last year to finance 2,000 motorcycles in Uganda, both electric and gas-powered. Untapped Global had previously partnered with Flexclub in South Africa.

Gozem appears to be preparing for a large fundraising round. Dana told Africa Report in March that the firm was looking for $80 million in Series B funding—$50 million in equity, $20 million in debt, and a $10 million pre-series B—as it prepared to grow into new markets such as Nigeria, the Democratic Republic of Congo, and Senegal.