InDrive to provide loans and credit facilities for drivers in emerging markets

InDrive, the global e-hailing company operating in 47 countries, is set to broaden its services by venturing into the financial sector. The company, founded by CEO Arsen Tomsky, aims to offer financial products, including small loans, to drivers in developing markets.

Techpoint reported that the initiative, driven by a commitment to securing long-term financial stability for its expansive driver base, will primarily focus on countries such as Nigeria, Kenya, Tanzania, Botswana, Ghana, and Namibia when introduced. In these regions, the ride-hailing company recognizes the financial challenges drivers face, particularly regarding vehicle repairs and overall financial strain.

Mark Loughran, the Group President of InDrive, emphasized the company’s interest in exploring financial services tailored to the unique needs of drivers in developing countries. While actively testing various ideas, InDrive is also seeking strategic partnerships to facilitate the provision of loans to drivers and delivery riders requiring financial assistance.

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Exploring new frontiers: InDrive’s venture into financial services for ride-hailing drivers

While the ride-hailing company is among the latest companies exploring financial services for ride-hailing and delivery drivers, it is not the first to do so. In Nigeria, Moove, a local mobility fintech, collaborates with Uber for vehicle financing, and Max has a similar arrangement with Bolt.

Previously known as inDriver, this ride-sharing company originated in Russia in June 2013 and relocated its headquarters to the United States in 2023. Despite this move, the ride-hailing predominantly conducts business in developing markets across Africa, Asia, and Latin America.

In contrast to competitors like Uber and Lyft, the company adopts a distinct ride-hailing model by allowing passengers to negotiate the fare for their trips, departing from fixed pricing. In the fourth quarter of 2023, InDrive initiated a $100 million program to invest in startups and businesses in emerging markets.

In February 2023, the ride-hailing firm introduced a unique debt instrument to raise $150 million with repayment linked to the company’s performance. This unconventional debt round offers the ride-hailing company repayment flexibility tied to profits generated over time.

Indrive is the latest ride-hailing company to offer loans to drivers

Ride-hailing companies extending loans and credit facilities to drivers in African countries offer a range of benefits. Firstly, this approach promotes financial inclusion by providing previously underserved drivers with access to financial services, overcoming traditional banking challenges.

Moreover, these loans address critical needs such as vehicle maintenance, ensuring drivers can keep their vehicles in optimal condition, and contributing to safety and operational efficiency.

Beyond individual drivers, the economic stability generated through such financial support has a broader impact. It stimulates local economies as drivers, equipped with credit facilities, become active contributors to various businesses and services. This ripple effect enhances the overall economic health of communities.

Additionally, offering loans creates opportunities for business expansion, as drivers can invest in their vehicles or consider scaling up operations. This not only benefits individual drivers but also has the potential to generate job opportunities within the local community.

Overall, the provision of loans and credit facilities establishes a symbiotic relationship between ride-hailing platforms and their drivers, fostering loyalty, competitive advantages, and positive contributions to the economic landscape in developing countries.

Read More: InDrive raises $150m in unusual debt round to develop new services