Tricycles, popularly known as Keke NAPEP, have become a ubiquitous sight on the streets of Nigeria in recent years. With their compact size and ability to navigate through congested traffic, tricycles have become a preferred mode of transportation for many Nigerians, especially in urban areas.
Tricycles were first introduced in Nigeria in 2001, as part of a poverty alleviation program by the administration of President Olusegun Obasanjo. The program was aimed at empowering low-income Nigerians by providing them with an affordable means of transportation. The tricycles were imported from India and were initially distributed to some states in the country, including Lagos, Kano, and Kaduna.
The introduction of tricycles in Nigeria was met with mixed reactions. While some people welcomed the idea, others criticized it, citing safety concerns and the potential impact on existing modes of transportation. Despite the criticisms, the program was successful, and tricycles became a popular means of transportation in the states where they were introduced.
Today, tricycles are one of the most common means of transportation in Nigeria, especially in urban areas. They are used for both short and long-distance trips, and they are often preferred over other means of transportation because of their affordability and flexibility.
In Lagos, for example, tricycles are used to navigate the city's congested streets, especially in areas where regular taxis and buses cannot access. Tricycles are also used for intercity transportation, connecting cities and towns across the country. In many cases, tricycles are the only means of transportation available to rural communities.
Tricycle transportation has become a significant source of employment in Nigeria, with thousands of people employed as tricycle riders, mechanics, and vendors. Many Nigerians have also invested in tricycles as a means of livelihood, owning and operating them as commercial vehicles.
The increasing demand for Keke Napeps has made it a lucrative business opportunity for entrepreneurs who are interested in the transportation business.
One of the ways to invest in the Keke Napep transportation business is through the Keke hire purchase business. Keke hire purchase business is a type of business model where an entrepreneur purchases a tricycle (locally known as "keke") and leases it to a driver on an installment basis. This model has gained popularity in Nigeria, especially in urban and semi-urban areas, as it provides an opportunity for people to earn a living by driving a tricycle without having to bear the upfront cost of purchasing one.
One of the primary benefits of the keke hire purchase business is that it provides an opportunity for people who do not have the capital to purchase a tricycle to earn a living. The cost of purchasing a tricycle in Nigeria ranges from three hundred thousand naira (₦ 300,000) to one million, two hundred thousand naira (₦ 1,200,000) depending on the make and usuage, which is a significant amount of money for most people. By leasing a tricycle on an installment basis, drivers can earn income without having to make a large upfront investment.
Another benefit of the keke hire purchase business is that it is a low-risk venture. The entrepreneur who purchases the tricycle is essentially leasing it to the driver, who is responsible for the daily operations and maintenance of the tricycle. As a result, the entrepreneur does not have to worry about the day-to-day operations of the tricycle and can focus on other aspects of the business, such as marketing and expansion.
The keke hire purchase business also provides an opportunity for entrepreneurs to earn passive income. Once a tricycle has been leased, the entrepreneur receives regular payments from the driver in the form of installments. This income can be used to cover the cost of purchasing additional tricycles, expanding the business, or reinvesting in other ventures.
In this article, we will discuss how to start a Keke hire purchase business in Nigeria.
Step 1: Conduct a Feasibility Study
The first step to starting any business is to conduct a feasibility study. A feasibility study helps you to determine the viability of the business idea and identify potential challenges and opportunities. When conducting a feasibility study for a Keke hire purchase business, you should consider the following:
Market demand: You need to determine the demand for Keke Napeps in your target market. You can conduct a survey to find out how many people use Keke Napeps in the area, the routes they use, and the time of the day when they are most in demand.
Competition: You also need to identify your competitors and their market share. Find out what they are doing right and what they are not doing well.
Costs: You need to determine the costs involved in starting and running a Keke hire purchase business. This includes the cost of buying the Keke Napeps, maintenance costs, fuel costs, insurance, and other operational costs.
Step 2: Register Your Business
After conducting a feasibility study, the next step is to register your business with the Corporate Affairs Commission (CAC). The CAC is the body responsible for registering businesses in Nigeria. To register your Keke hire purchase business, you need to provide the following documents:
Business name registration
Tax identification number
Memorandum and Articles of Association (MEMART)
Certificate of Incorporation
Step 3: Raise Capital
The next step is to raise capital for your Keke hire purchase business. You can raise capital through various means, including personal savings, loans from family and friends, or bank loans. It is important to have a solid business plan and financial projections when seeking funding from investors or financial institutions.
Step 4: Purchase Keke Napeps and Install Trackers
Once you have raised the capital, the next step is to purchase Keke Napeps. You can buy new or used Keke Napeps from dealerships or private sellers. It is important to do your due diligence when purchasing Keke Napeps to ensure that they are in good condition.
Installing trackers would enable you to know the location of keke at any point in time.
Step 5: Hire Drivers
After purchasing the Keke Napeps, the next step is to hire drivers. You can advertise for drivers through social media, newspapers, or word of mouth. It is important to conduct a background check on the drivers to ensure that they have a valid driver's license, a good driving record, and are trustworthy.
Step 6: Draw Up a Lease Agreement
Before leasing the Keke Napeps to drivers, you need to draw up a lease agreement that outlines the terms and conditions of the lease. The lease agreement should cover the following:
The duration of the lease
The amount of the lease payments
The terms of the lease renewal
The terms of termination of the lease
The responsibilities of the driver
The responsibilities of the Keke hire purchase company
It is important to have a lawyer review the lease agreement to ensure that it is legally binding and protects the interests of both parties.
Step 7: Give out the keke and start making money
Challenges of Keke Hire Purchase Business
While the keke hire purchase business has many benefits, it also has its fair share of challenges. One of the main challenges is the high rate of default by drivers. Because the tricycle is leased on an installment basis, the driver is responsible for making regular payments to the entrepreneur. However, many drivers default on their payments, which can lead to financial losses for the entrepreneur.
Another challenge of the keke hire purchase business is the high cost of maintenance. Tricycles are prone to wear and tear, especially with constant use on Nigerian roads. As a result, entrepreneurs who lease out tricycles have to bear the cost of maintenance, which can be expensive.
In addition, there is a high level of competition in the keke hire purchase business, which can make it difficult for entrepreneurs to expand their businesses. As more people enter the market, it becomes increasingly challenging to find drivers who are willing to lease tricycles, and the profit margins can become razor-thin.
Strategies for Success in Keke Hire Purchase Business
Despite the challenges, there are several strategies that entrepreneurs can adopt to succeed in the keke hire purchase business. The first strategy is to conduct thorough due diligence on potential drivers. Before leasing a tricycle to a driver, the entrepreneur should conduct a background check to ensure that the driver has a good track record of making payments on time. This can help reduce the risk of default and increase the likelihood of success.
Another strategy is to invest in tricycles that are durable and require minimal maintenance. While these tricycles may be more expensive upfront, they can help reduce the cost of maintenance and increase the lifespan of the tricycle. This can help improve the profitability of the business and reduce the risk of financial losses due to maintenance issues.
Entrepreneurs can also explore new markets and expand their businesses by leasing tricycles to drivers in underserved areas.
Despite the challenges facing tricycle transportation in Nigeria, the industry is poised for growth in the coming years. The Nigerian government has recognized the importance of tricycles as a means of transportation, and there are ongoing efforts to regulate the industry and ensure the safety of riders and passengers.
One of the ways the Nigerian government is seeking to address the challenges facing tricycle transportation is by introducing electric tricycles. The use of electric tricycles will help to reduce the environmental impact of tricycle transportation and improve the safety of riders and passengers.
In addition, the government is also exploring the possibility of integrating tricycles into the country's public transport system.
Nigeria is the most populous country in Africa, with an estimated population of over two hundred million (200,000,000) people. This presents a significant market for transport market. Starting a Keke Hire Purchase Business in Nigeria is easy and can help the investors to make tons of money.
