Uber announced today that it is now making low-interest, used-vehicle loans available to its top-rated partners (drivers). This is as a result of the partnership between Uber Nigeria and First Bank of Nigeria Limited (FBN), as well as smaller financiers. The arrangement means that Uber driver-partners in Nigeria will be able to apply for finance for used vehicles based on their driver performance records, giving them a direct line to car ownership.

The initiative is intended to create significant business growth opportunities for driver-partners by allowing them to access used-car finance from FBN at a rate of 20 percent per annum over a 24 month repayment period. Alternative offers for used-vehicle finance on the programme will attract 22 percent per annum, with a maximum repayment term of 36 months. To qualify for this preferential used-vehicle finance, Uber driver-partners will need to be rated higher than 4.5 and have earned more than N2.4 million in the preceding 6 months.

The auto financing scheme gives drivers the opportunity to truly transform their lives by establishing and expanding viable and sustainable businesses of their own, thus increasing their long-term income potential and profits. Employees sometimes find it risky or unattainable to make that jump to self-employment and flexibility, but under this scheme, the drivers have a clear path to that destination.

The caveat, however, is that the requirement qualification is relatively high. Drivers would need to make an average of N400,000 monthly as well as receive a 4.5 star rating to qualify. This would mean long hours, and presumably driving during inconvenient peak times to meet the requirements. Subsequently they would have to keep up a similar pace if they are to meet up with interest payments and still have sufficient disposable income. Moreover details of the minimum down payment required was not disclosed in Uber’s press release, so whether this is a hurdle or contributes to reducing the cost of borrowing is yet to be known.

Uber stands to benefit from this initiative as it would mean more drivers on the road, hence more revenue; FBN also stand to benefit from loan interest payments.
The scheme should create a lot of new vehicle owners as the economy suffers recession and importantly empower individuals by offering a path to sustenance.

Ebi Atawodi, general manager of Uber Nigeria, remarked, “We are absolutely committed to making it as easy as possible for our driver-partners to start and maintain their own successful and profitable businesses…and these used vehicle finance options make it possible for those with a demonstrable performance commitment to build sustainable businesses without incurring the high costs often associated with new vehicle purchases.”

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