Under the programme, SBI will offer car loans to drivers on Ola’s platform with a daily repayment scheme as against the current practice of an EMI. Drivers on the Ola platform will also benefit from lower down payment of just 10%, 24-hour loan approval from SBI and easier documentation. SBI says that it will provide loans at an average rate of 13% and the daily repayment amounts would be about Rs 500- 600.
It’s also reported that cars financed by SBI will have GPS for enhanced safety.
.@Olacabs launches ‘Ola Pragati’ in assoc. W/ SBI to offer a first-of-its-kind daily repayment program for its drivers.
— Abhash Kumar (@AabhashK) February 27, 2015
It’s also worth noting that SBI has one of the largest car loan portfolios in the country and reported a loan book of Rs 30,701 crore for the quarter ended December 2014, up 10.84% y-o-y (pdf).
Olacabs had initiated a similar program to fund drivers, but out of its own pocket, in partnership with Milaap. The program involved sending a ‘message’ to the driver on Milaap’s platform which would contribute Rs.100 towards buying a new car.
That campaign is however, now closed. Interestingly, VP of operation at Ola Pranay Jivrajka told ET that it has been helping drivers get cheaper rate on new cars and insurance over the last 2 years, and claims to have helped 10,000 drivers in its network own their cars. After raising $210 m in funds in October 2014, Olacabs had mentioned that it was also planning to use the investment to strengthen its driver ecosystem in the country and had earmarked Rs 100 crore towards this initiative for the next one year, a probable extension to the aforementioned project.
Competitor Uber in November too had launched a vehicle financing programme with lending firms like Sriram Finance, AU Financiers and Toyota Financial Services. Under the programme, drivers will be able to avail financing schemes with down payment as low as Rs 60,000 to buy a new car to work for Uber. Along with providing low down payments, superior finance rates and faster turnaround time for loans, drivers will also be able to avail discounts on car prices from auto companies like Mahindra, Tata Motors, Toyota and Maruti Suzuki.