Uber Partners FirstBank to Offer Loans at 20% Interest to Nigerian Drivers

  • Uber plans to double driver-partners by year-end from 2,000

U.S’ based Uber Technologies Inc. is partnering Nigeria’s FBN Holdings Plc’s First Bank  to provide access ti loans to drivers as a cash crunch in Africa’s most populous nation and a shrinking economy makes it harder for people to afford cars.

“A lot of drivers on the platform have to find somebody who can afford to buy’’ the vehicle for them and the economic situation makes it difficult, Ebi Atawodi, general manager for Uber’s Nigeria unit, said in an interview in Lagos, the nation’s commercial capital. “Usually they are working for a partner who has bought the vehicle.’’

“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,” Atawodi explains, “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.”

The move is set to create significant business growth opportunities for driver-partners by allowing them to access used-car finance from First Bank of Nigeria Limited at a very competitive interest rate of just 20% per annum over a 24 month repayment period. Alternative offers for used-vehicle finance on the Uber Vehicle Solutions Programme will attract 22% per annum, with a maximum repayment term of 36 months.

Atawodi is quick to emphasise that Uber’s commitment to helping its driver-partners build their businesses extends far beyond just making innovative vehicle finance available to them. Rather, these offerings come on the back of Uber’s existing range of innovative business-building solutions, including Uber Marketplace, which is a one-stop national vehicle access solution designed to connect driver-partners and investors to suitable vehicles at discounted rates. Uber Nigeria also recently launched its well-received UberMomentum Partner Rewards Programme that delivers localised discounts, preferential deals and rewards exclusively to driver-partners and small business owners.

“The growing suite of vehicle finance, business and lifestyle solutions that Uber Nigeria is making available to driver-partners and other business investors reaffirms our commitment to supporting and partnering with them to ensure their success,” Atawodi explains, “not just in terms of helping them to increase their income and profits, but more importantly by affording them every opportunity to truly transform their lives by establishing and expanding viable and sustainable businesses of their own.”

“By linking these solutions to the performance of our driver-partners, we further increase their chances of long-term business success, while at the same time building a network of transport professionals that Nigerians know they can trust to get them to their destinations safely and comfortably,” she concludes.

First Bank will extend a 2.5 million-naira loan ($7,930) to each qualified driver for the purchase of a second-hand car at an interest rate of 20 percent and repayable after two years, she said. To qualify for the loan, the driver “will need to be able to demonstrate an average driver-performance rating of higher than 4.5 and have earned more than 2.4 million naira’’ in the past six months, Atawodi said.

The Nigerian economy is struggling to cope with a halving in the price of crude oil price since 2014, which eroded government revenue and impaired the ability of authorities at federal and state levels to pay salaries and stimulate growth. The economy is set to shrink 1.7 percent in 2016, according to the International Monetary Fund, which would be the first full-year recession in a quarter of a century.

Double Drivers

First Bank will use part of its 10 billion-naira auto-credit facility to fund the Uber program, Gbenga Shobo, deputy managing director for the Lagos-based lender, said in the same interview. The bank is targeting 90 drivers at the pilot stage, he said.

According to MD/CEO, First Bank of Nigeria Limited and Subsidiaries, Adesola Adeduntan, the Bank is committed to supporting entrepreneurs to build sustainable businesses which are pivotal in stimulating economic development. “It remains our business to foster the growth and development of small and medium scale businesses in Nigeria as the No1 SME Bank. This is the reason why we have partnered with Uber by empowering operators to own vehicles and build profitable businesses,” he further stated.

In order to qualify for this preferential used-vehicle finance from First Bank of Nigeria Limited, Uber driver-partners will need to be able to demonstrate an average driver performance rating of higher than 4.5 and have earned more than N2,400,000 in the preceding 6 months.

Uber, which connects drivers with passengers via its smartphone application in more than 300 cities across the world, is operating in Nigeria’s capital, Abuja, and commercial hub of Lagos since it entered the West African nation’s market in 2014. It currently has more than 2,000 drivers and is targeting 4,000 by the end of this year, according to Atawodi. The company has offered over a million trips in the country, she said.



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