Low-cost branded bicycles drive new BCtA member, Mozambikes’ inclusive business

Mozambikes, an award-winning Mozambique-based social enterprise, has joined the Business Call to Action (BCtA) with a commitment to improve the lives and livelihoods of 50,000 of the country’s poorest people through the sale of affordable branded bicycles by 2018. The company will also establish a national sales and distribution network to provide an additional 125,000 people with transportation by 2020.

BCtA is a global initiative that encourages companies to fight poverty through inclusive business models. It is supported by the United Nations Development Programme (UNDP) and other international organisations.

Mozambikes’ inclusive business model involves importing bicycle components for local assembly, which are then branded the colours and logos of organisations. These companies distribute the bicycles to their stakeholders as transport, bonuses, incentives and social responsibility. Alternatively, the organisations can pay to advertise on the bicycles, allowing the company to sell bikes to consumers at below-market rates. With this “Made by Mozambicans, For Mozambicans” model, the company’s workers take pride in building a product that will help their neighbours. The company is the first transportation provider in Mozambique that seeks to make bicycles truly affordable. Mozambikes also provides training and after-market service, including workshops for female riders and road safety campaigns in an effort to build the country’s bicycle industry.

“Our overarching goal is to fight poverty in Mozambique with efficient and affordable quality transportation – the bicycle!” says Lauren Thomas, Mozambikes’ founder and chief executive officer. “Solving the need for efficient, accessible, and reliable transportation with low-cost, sturdy bicycles opens up opportunities, autonomy, and employment for poor people across the country. We are honoured to be recognised by BCtA for our work as we continue to promote a culture of cycling in urban Mozambique.”

Nearly 20 years after the end of a civil war, poverty persists in Mozambique; according to the United Nations Statistics Division, 54% of Mozambicans live below the poverty line. Walking is the normal mode of transportation, but is particularly challenging in rural areas. Most rural people live on less than $1 (66p) per day and lack basic services; two-thirds have to walk more than an hour to access health care. Only 60% have access to safe water and 57% to primary education, according to the 2012 International Fund for Agricultural Development’s Rural Poverty Portal. It is estimated that 70% of Mozambicans work in the informal economy, where their incomes are generated by what they can produce – usually through subsistence farming – which they must then transport to market.

Limited access to transportation in poor countries significantly impedes development. Bicycles offer efficient, accessible, reliable and importantly, affordable transportation. They can carry up to four times their weight, can travel much farther and faster than walking on foot, and are easy to repair.

The bicycle industry in Mozambique is inefficient, however, with only a few providers offering low-quality items at prices that are out of reach for most Mozambicans. Bicycle programmes in other countries have proven to be effective development catalysts, showing that bikes alone can change people’s lives.

Mozambikes uses three distinct sales channels as part of its inclusive model. Companies and civil-society organisations can purchase fully branded bicycles for their own business needs. These might include awards to loyal customers, social responsibility initiatives in which bicycles are purchased for beneficiaries, employee bonuses or as transport for conducting business. Mozambikes examines each organisation’s individual business model and proposes a program to suit the client’s needs.

Second, organisations can pay a fee for branding the bicycles, which allows Mozambikes to sell them at below-market rates. This channel is growing; historically, branding customers had preferred to take ownership of the bicycles for their own distribution.

Finally, people from around the world can donate bicycles through Mozambikes’ website and the company donates those bicycles to people earning less than $2 (£1.32) per day, who also explain to the company how the bicycle will improve their quality of life and income opportunities. This is a small portion of their business.

To date, Mozambikes has sold more than 7,000 bicycles, largely through its branded bikes channel. By 2020, annual sales are projected to reach 25,000 per year. Since bikes are commonly used by entire families, the lives of 125,000 will be positively impacted. Moreover, the business has broken even with company cash flows sufficient to fund successive receipts. As a result of its success, the company is growing and is able to pay its workers above minimum wage salaries.

Word of the business’ success has spread beyond Mozambique and the company has received inquiries from several neighbouring countries. While Mozambikes remains focused on building its distribution network within Mozambique, its BCtA commitment involves initial marketing in South Africa and Swaziland, which can be serviced from the Mozambikes’ existing warehouse.

Mozambikes’ innovative model has been recognised by SIDA/Innovations Against Poverty, USAID Innovation Development Ventures, the William James Foundation (Africa Award; Venture Stage Award runner up), Cartier Women’s Business Initiative (finalist). It was also the SEED Award Winner in 2014, a finalist in the BIDNetwork Women in Business competition, a semi-finalist in the Echoing Green Fellowship, and has been featured on CNN Marketwatch Africa and others.

“Mozambikes sales and distribution model, coupled with its efforts to build a viable biking culture in the country, is a prime example of the private sector addressing a development challenge through innovative market-driven initiatives,” said Sahba Sobhani, BCtA acting manager. “We are pleased to welcome Mozambikes as BCtA members and look forward to watching this model grow.”

Watch the case study of Mozambikes on Youtube.

Content on this page is provided by Business Call to Action, and originally appeared on the The Guardian Business and the Sustainable Development Goals Hub