Towards the end of last week Uber entered into a partnership with mobile phone based lender Branch. The partnership is aimed at advancing loans to Uber drivers in Kenya. The loan is meant to help the drivers set up their own businesses and also apply for necessary licences.
The driver must have completed a minimum of 500 trips to be consider for the personal loan advancement. On top of that the driver needs to high a high rating. By high rating this means that the driver needs to have a minimum of 4.6 stars rating.
“At Branch, we are using alternative data sources and proprietary machine learning technology to overcome this hurdle (credit risk assessment) and make accurate lending decisions.”
-Daniel Szlapak, Africa director for Branch
“There are now many more sources of data that lenders can use to underwrite borrowers Digital jobs like driving an Uber leave behind digital ledgers. Lenders can use these ledgers to do underwriting.”
-Branch founder Matt Flannery
Branch will essentially use data from Uber to grant loans to drivers. Qualifying drivers will receive loans starting from Ksh.30,000. This personal loan will be repayable in six months. Branch will charge an interest rate of 1.2 percent per month which translates to a fee of Ksh.2,160.
It cannot go without noting that Uber and Sidian bank signed a partnership to offer loans to driver-partners earlier in the year. The partnership was for Sidian to set a Ksh.10 billion fund from which to advance loans to Uber driver-partners. The loan advance ranges from Ksh.1 million up to Ksh.1.5 million to each Uber driver. The loan advancement is repayable in three years at a fixed interest rate of 10.5 percent per annum.
Existing drivers using the Uber App will be able to apply for the loan on Uber’s driver-partner website kenya.ubermovement.com