Are you interested in starting a keke NAPEP Business? We will show you how.
Keke NAPEP is a common name in Nigeria for tricycles. When translated, Keke is an Hausa word that means tricycle. While NAPEP is an acronym for the National Poverty Alleviation Program of the Federal Government of Nigeria.
This was introduced in the year 2000.
Keke NAPEP is a popular mode of transport across Nigerian towns and cities. This has even been made more popular by the peculiarities of Okada (motorbike) operations.
Keke has created many business opportunities in Nigeria that you too can take advantage of.
Types of Keke NAPEP Business Models
These are the three major ways of operating a Keke NAPEP business. These include renting, operating and hire purchase.
- At the level of renting, you get to buy one or more tricycles. This is done with the purpose of renting or leasing same to operators. Under this arrangement, the agreement is for the operator to bring in returns at the end of the day, week or month depending on what works best for you.
- Keke NAPEP operators on the other hand are persons directly involved in the day to day running of the business. You’d find these in all cities across the country. They typically operate short distances within the towns.
- Hire purchase is similar to renting. Although the difference here is that you are giving out your tricycles for an agreed-upon term. During this time, the operator pays for eventual ownership in installments. This is quite popular as well.
Starting as a Keke Operator
This is the most common type of keke NAPEP business.
Here, you may choose to buy one for the purpose of operating it yourself. This model will need you to get the funds required to purchase one. Another way to start is by renting from Keke owners or seeking for persons offering hire purchase opportunities.
But how do you know about such opportunities? You can start by talking to dealers. Apart from the likelihood of doing so themselves, they are likely to know persons buying for the purpose of giving them out on hire purchase.
But generally, starting as an operator is less financially demanding than the other alternatives.
Buying for the Purpose of Rent or Hire Purchase
Any of the above options may interest you. However, we’ve seen that these require substantial capital depending on how many you’d like to purchase.
You first need to find out the cost of a single unit to determine how many you can afford.
How Hire-Purchase Works
After buying your tricycle at a cost of N400,000 to N450,000, the same can be sold at the cost of N600,000.
However, the buyer doesn’t pay a lump sum. The give-out cost is paid in installments over a set period of time.
In this situation, you have succeeded in making a profit of 600,000-450,000=N150,000.
Under the hire-purchase option, more profits are made with more keke NAPEP’s sold out, but of course your capital requirements are greater.
Startup Costs for Keke NAPEP Business
Starting this transport based business depends on your preferred choice as stated above. The business models needing the most capital commitment include buying these tricycles for the purpose of hire purchase. The other involves buying for the sole purpose of renting them out.
For both of these, raising the needed capital is crucial.
Cost of Tricycles
Purchasing tricycles will take up about 98% of cost. However, knowing your exact capital requirements will depend on knowing how much these tricycles cost. There are slight variations in cost depending on the city you live in.
Cost also depends on whether you prefer going for new tricycles or fairly used ones.
In view of these, the cost of a brand new tricycle will range between N420,000 to N450,000. If you’d rather go for a fairly used one, then cost should vary from N200,000 to N250,000.
But we recommend you avoid going for used ones. The point being, these could have developed several faults that could hamper your operations.
Finding the Right Keke Drivers
No matter how well prepared you think you are, you may be undone by your drivers. In other words, the type of drivers you choose will determine how well your business goes.
So, finding the right persons is as important as planning for any aspect of the business. If you do not have any Keke driving experience, try to gain some by having a feel of what it is like on different business days.
Consider operating it yourself. The experience you gain is critical. You should also consider talking to existing operators.
By presenting yourself as an interested operator, you gain a lot of knowledge about its intricacies. Its best to hire drivers through recommendations from people you trust. Through this structure, your drivers are easily put in check when things go wrong.
Keke NAPEP Registration
Registration is a key component of the business. There are keke NAPEP associations in every state. These unions regulate the activities, as well as set fees for all operators and owners. You’d have to find out what applies to your state.
However, registration fees aren’t that expensive. At most, you’d be required to pay N5,000 to N6,000.
How to Break-Even in KeKe NAPEP Business
Recouping your investment is the central focus of this business. Hence, the need to have this carefully planned out from day one. There’s a formula you can use to work this out:
Your Initial Capital and Purchase Cost = Time Required to Recoup Investments Your Weekly Returns
The time required to recoup investments depends on if you buy a new or a fairly used tricycle. There needs to be a balance between time taken, condition of your tricycles, as well as initial costs.
These are the basic ways of starting a keke NAPEP business. You’d have to choose your preferred business model.
This allows you narrow down to other specifics as provided here. Such detail should be clearly stated in your business plan. The information provided here will help with the full implementation of your plan.