Uber, First Bank Nigeria to offer loans to drivers

UBER Technologies is partnering with FBN Holdings’ First Bank Nigeria to provide loans to drivers as a cash crunch and a shrinking economy make 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 made it difficult, Ebi Atawodi, the general manager for Uber’s Nigeria unit, said.

“Usually they are working for a partner who has bought the vehicle.”

First Bank would extend a 2.5 million naira (about R110 380) loan 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, she 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 this year, according to the International Monetary Fund, which would be the first full-year recession in a quarter of a century.

First Bank would use part of its 10 billion naira automotive credit facility to fund the Uber programme, Gbenga Shobo, the deputy managing director for the Lagos-based lender, said.

The bank was targeting 90 drivers at the pilot stage, he said. – Bloomberg