 "Ola launches daily-repayment car loan scheme for its drivers")
Under the program, which has been named 'Ola Pragati', SBI will offer car loans to drivers who work with Ola under a daily repayment scheme as against the current practice of equated monthly installment (EMI). The program will also give the benefit of a lower down payment and faster clearance of loans for Ola drivers.
Drivers who avail a loan under this program will need to continue working with Ola for 60 hours a week for a stipulated period of time, depending on the terms of their loan. If they choose o change the operator that they work with, their loans would be converted into a regular car-loan with SBI.
As per the program, a driver can get a loan for a down payment of just 10%, with an average interest rate of 13%. The loans under the scheme will be cleared within 24 hours and the repayment amount for drivers is estimated at Rs 500-600 per day.
"EMI is best suited for the salaried class. Drivers have a cash inflow on a daily basis and for them to pay a lump sum at the end of the month is difficulty," said Puneet Singh Arora, head strategic initiatives at Ola. "Ola expects at least 1,00,000 driver entrepreneurs enrolling under the Ola Pragati program in the next couple of years.
The company said that the daily payment mechanism gives the financing institution better visibility of loan repayment and more lending comfort. The program will work in sync with the daily settlement process of Ola drivers.
Ola currently operates in 67 cities and clocks over 2,00,000 rides per day. The company has launched several initiatives in the past to encourage drivers.
Recently, Ola had set up a fund of Rs 100 crore to enable drivers buy their own cars and turn driver entrepreneurs. The company has run several initiatives in the past two years to support drivers.