MUMBAI: Drivers who ply cars on Uber network can now avail a loan at rates under 12% following a tie up with the State Bank of India. The loans will be cheaper because they are covered under the Pradhan Mantri Mudra Yojana and also because Uber will deduct instalment dues from every fare received into the driver’s account.

Uber is the world’s largest on-demand transport aggregation company which is seeking to expand its presence in India. SBI said that the loans will be sanctioned instantly using an inbuilt digital offering and covert drivers into entrepreneurs.

SBI said that it would not seek any collateral for the loan and would extend the loan at a very competitive interest rate. “The on-demand transportation segment growth has created a whole new ecosystem enabling lakhs of Indians to earn livelihood by becoming micro-entrepreneurs on such platforms. In the process, it has also opened up a new world of opportunities for the banking industry, not just in the on-demand transportation loan space but also in other areas like payment wallet, and consumer finance, ” SBI Chairman Arundhati Bhattacharya said, after launching the product.

“India is a global market priority for us; the robust growth we’ve seen in India in just about two years is phenomenal. In such a short span of time, we’ve got over 250,000 driver partners on our platform who have become micro-entrepreneurs today” said Eric Alexander, President of Business, Asia Pacific at Uber. He added that Uber expected to create ‘tens of thousands’ of micro entrepreneurs by enabling them to start their careers on the Uber platform, by owning their cars, through this program with SBI.

Under the new facility, drivers can apply for loans at the Uber Partner Centre and get loans sanctioned in one-day. SBI’s digitally integrated backend system would eliminate the long processing time that other auto loan seekers are subject to.