- Loans ranging from BRL 1,000 to BRL 5,000 will charge an interest rate of 2.97% per month;
- Digio has about 1.6 million customers and the goal is to attract 5 million customers and generate BRL 1 billion in personal loans per year by 2023.
Mobility and delivery app company Uber has partnered with digio, a digital bank controlled by Bradesco and Banco do Brasil to offer personal credit lines to its drivers in Brazil. Loans ranging from BRL 1,000 to BRL 5,000 will charge an interest rate of 2.97% per month, with a settlement term of up to 12 months.
From the start, the program is aimed at 1,000 drivers, while it is modulated to reach all Uber drivers and couriers in the country, which total about 1 million workers. Unlike traditional loans where installment payments are made monthly, digio’s line allows a weekly retention of repayments, according to drivers’ revenue, with a discount on installments paid in advance.
The amounts owed by drivers will be retained by Uber, but the U.S. firm will not back loans nor receive part of the income from financial operations.According to digio’s New Business superintendent, Eid Tayar, this personal credit model may be scaled up and eventually reach other platforms that provide intermediate services for independent professionals. “This applies for every service provider that has recurring receivables,” Tayar told Reuters.
Digio has about 1.6 million customers and the goal is to attract 5 million customers and generate BRL 1 billion in personal loans per year by 2023.The move comes as banks look for ways to expand their credit portfolios on lower risk lines, with the Brazilian economy plunged into a recession caused by the effects of the Covid-19 pandemic.
In the second quarter alone, provisions of the five largest banks in the country for expected losses from defaults exceeded BRL 30 billion, a record. For Uber, the initiative is part of a movement to try to expand the bond with its associates, as the dispute between app companies grows among drivers and delivery workers, who often use more than one of them simultaneously.
In addition to the agreement with digio, Uber has already partnered with education, health and gas stations companies to offer products at favorable prices for its members.”One of the goals of the program is to generate loyalty,” said Claudia Woods, general director of Uber in Brazil.
Translated from Portuguese to English by João Paulo Pimentel