India’s largest lender State Bank of India (SBI) has partnered with taxi-hailing service Uber to provide its drivers with vehicle finance, sources told FE. According to a source, the meeting took place at SBI headquarters here on Tuesday and was attended by chairman Arundhati Bhattacharya and Uber head of Asia operations Eric Alexander.
Under this arrangement, Uber will give SBI an assumption of what a driver could earn in a particular city. “The EMI will come through payouts Uber makes to the driver,” the source said, adding that the payout will be channeled through SBI, which will debit the EMI and credit the rest to the driver’s account, thereby ensuring minimal chance of default.
“This is not the traditional model done through income tax returns but through an entirely digital process. The processing is through a digital tool similar to SBI e-smart SME launched sometime back,” the source added. This product uses proprietary platform data and surrogate information from public domain to assess the driver’s credit worthiness for loan sanctioning.
Since all of the car loans will fall under Rs 10 lakh, they will automatically be covered under the MUDRA scheme and the credit guarantee fund trust for micro and small enterprises (CGTMSE) scheme of SIDBI and Ministry of Small and Medium Enterprises.
“Borrowers do not need to provide collateral for these loans and drivers will be able to avail finance up to 90% of the value of the car,” a source added.
The scheme was launched in Mumbai and Hyderabad. SBI has already received applications from 100 drivers, and more applications are waiting to be processed.
In January this year, SBI had launched SBI e-Smart SME, a working capital loan offering for sellers on e-commerce platforms in partnership with e-commerce platform Snapdeal, which has close to 2.3 lakh sellers.