Uber and Jumo - a Cape Town-based fintech - have partnered to create an asset financing product, dubbed Jumo Drive. The product is going to be rolled out across Sub-Saharan Africa after a "successful" pilot in Kenya.
Justin Spratt, Head of Business, for Uber Middle East and Africa explains, “Earlier this year, Uber and JUMO ran a pilot with a select number of Uber drivers in Nairobi who were pre-approved based on their driving behaviour. Based on the success of the pilot, we are happy to bring this innovative financial solution to driver-partners in Sub Saharan Africa.”
According to the press release, Jumo Drive will aim at "easing barriers to car ownership for existing Uber driver-partners". Applications to join the initiative need "no upfront costs, no sign-up fees and no deposits".
To arrive at the credit allocation decision, the JUMO Drive and Uber app will work together to generate and facilitate the credit scoring and application process for the drivers.
According to JUMO, the entire sign-up process, from logging in, to credit approval, can take less than 15 minutes. And can "see drivers on the road in their own vehicle in under four weeks".
The drivers will get access to a tracking device and a service and maintenance plan. This is to ensure they are able to keep their vehicle up and running in good working order.
"JUMO’s unique data prediction capabilities utilise driver behavioural data to facilitate credit scoring and offer JUMO Drive to qualifying driver-partners."
The driver’s earnings, trips and behaviour patterns determine the credit risk score of the drivers, which ensures each driver receives an offer that is individually designed. Bank partners on the JUMO platform will provide the finance for the vehicles.
Across Africa, it is not uncommon to find that most Uber drivers do not own the cars. This means a decrease in their take-home. Additionally, it also takes away the incentive that comes with of ownership. It was, thus, a matter of time before one came in to ensure that to these drivers.
Earlier this year, Tugende - an asset financing company in Uganda - raised $5 million from OPIC. Part of the goal was to venture into financing cabs.
Although their target wasn't particularly Uber drivers. It is, however, not hard to understand that majority of their clients are likely to be such drivers. From Uber, Taxify, Little and other ride-hailing companies.
Lending is now a default part of most SME facing startups in Africa, thanks to the hardships SMEs face in accessing credit.
Last year, Jumia announced that it would start lending to vendors in Kenya, while South Africa's YOCO - which raised $16 million this year - also started giving loans to its merchants.