Online taxi service Uber has secured a R200 million deal with vehicle finance provider WesBank to rent cars to drivers who cannot afford to buy them.
According to WesBank chief executive, Chris de Kock, some 50% of car loan applications in South Africa are declined. Under this new deal, Uber drivers unable to qualify for traditional car loans due to a lack of credit history will be able to rent cars from WesBank. The lender will recover the loan from the fares the drivers collect, thereby lowering the bank's risk. What the drivers earn from their business will determine their repayment.
Wesbank is the lending arm of FirstRand, and the bank is taking their offering a step further still. Its enterprise development group Vumela will educate drivers on how to run their businesses, as well as pay cash to WesBank in the event that car loans are not paid. It will also finance R20 million for the first 1,000 cars.
San Francisco-based Uber, which currently operates in over 60 countries, was launched in SA a little over two years ago. According to reports, the company is currently valued at over $50 billion.