BUSINESS

Over 100 Uber drivers get Sidian Bank loans to acquire cars

Eligible drivers must have completed at least 500 trips with Uber.

Sidian Bank has advanced loans to 138 Uber drivers under a credit model that is dependent on driver ratings on the ride-hailing app.

According to Business Daily, the Centum backed tier III bank, formerly known as K-Rep, began issuing asset-financing Uber loans in June last year, offering up to Sh1.5 million at concessional rates to drivers with high performance and customer satisfaction ratings.

However, Sidian Bank has missed the 200 loans target to Uber drivers it had set to achieve within a year.

Sidian Bank managing director Chege Thumbi in an interview termed the vehicle purchasing loans for Uber drivers as “a transformation story.”

Eligible drivers must have completed at least 500 trips with Uber and have an average passenger rating score of at least 4.6 points out of the total of five marks.

The car loans are charged an interest rate of 10.5 per cent per annum, which is lower than the capped rate of 14 per cent offered by all commercial banks.

Sidian Bank issues the Uber loans in partnership with Zohari Leasing Ltd, a wholly-owned subsidiary of Centum formed in April 2016.

The lender last year said it had set aside Sh10 billion towards the Uber loans project to help convert drivers into entrepreneurs who own their own cars.

“It’s really a data-driven approach to credit risk analysis, dispensing with the traditional banking method and relying instead on the data that Uber has collected,” Sidian said when it launched the scheme.

Uber is banking on the Sidian Bank loans to attract more drivers to its platform and ward off stiff competition from rivals such as Safaricom Little, Mondo Ride, Taxify, and Teke Taxi. The San Francisco-based firm says it has so far made more than 12 million trips in Kenya since launch in January 2015.

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