BackOla partners SBI to provide easier loans to cab drivers
Firm seeks to add 100,000 cabs to its system in the next two years to expand business in India
Premium(Ola has 75,000 cabs on the road with about 100,000 drivers in the system in 67 cities across the country.)
Bengaluru: ANI Technologies Pvt. Ltd, which runs the Olacabs taxi-hailing service, said on Friday that it has entered into an agreement with the State Bank of India (SBI) to provide easier car loans as the company seeks to add 100,000 cabs to its system in the next two years to expand business in Asia’s third-largest economy.
“We see a huge opportunity to pump in more supply into the system that is always facing a shortage," said Pranay Jivrajka, vice-president operations at the cab aggregator.
Ola has 75,000 cabs on the road with about 100,000 drivers in the system in 67 cities across the country. The start-up has doubled its network in one year.
The taxi aggregator, founded in 2011, has raised several rounds of funds from the world’s top private equity firms as it seeks to fund its expansion, especially in smaller markets. In July last year, the company raised ₹ 250 crore in its third round of funding from Hong Kong-based equity hedge fund Steadview Capital and venture capital firm Sequoia Capital.
The company has a target of reaching to 200 cities by the end of the year to March.
“This programme will particularly be relevant, especially in smaller cities where Ola and SBI are present, where access to capital is limited," said Jivrajka.
The idea is to lower the entry barrier to the business, he added.
The financing option will help car drivers to own cars with a 10% down payment, much lower than an average down payment of 15-20%, and will provide daily payback options, as opposed to monthly instalments. The average rate of interest would be charged at 13%.
The taxi-hailing market has exploded in the India in the past two years, driven by investments by companies such as San Francisco-based Uber and Bengaluru-based Taxi For Sure.
Olacabs was founded in January 2011 by Bhavish Aggarwal and Ankit Bhati, both alumni of the Indian Institute of Technology, Bombay.
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