Ride-share application inDrive has partnered with financial technology firm R2 to extend loans to its drivers in Mexico, the company said on Tuesday, in a bid to provide financial services in a nation where access to credit can be cumbersome.
The app has also teamed up with Mastercard (MA.N), opened a new tab, and local fintechs Giro and Galileo to provide credit cards to drivers, starting in the northern industrial town of Monterrey.
“Imagine if your whole livelihood is around a car or a motorbike, and imagine if it breaks,” Group President Mark Loughran told Reuters ahead of the announcement. “Imagine that’s going to cost you $150 to fix. But what if you can’t fix it?”
In Mexico, large swaths of the population remain unbanked. And those who can open bank accounts – such as inDrive’s drivers – often have difficulties accessing formal credit through loans or credit cards, and credit histories can be scarce.
Loughran stressed that inDrive was looking to provide reasonable options to drivers in the face of sometimes “extortionate” alternatives.
He said the average loan to drivers will total around $300, with interest rates close to the overall standard in the country. Average interest rates on personal loans are at nearly 46%, according to a report earlier this month by Mexico’s central bank.
The loan and credit card offerings are inDrive’s first venture into financial services. The app is available in nearly four dozen countries.
Loughran pointed to Brazil, Colombia, Egypt, Pakistan, and Kazakhstan, where the app already operates, as potential targets for offering similar services in the future.
The executive is currently in Mexico after visiting both Brazil and Colombia. In all three of the countries, inDrive is also weighing the launch of a business-to-business last-mile delivery service, Loughran said. (https://www.reuters.com/technology/ride-share-app-indrive-launches-loan-credit-card-offering-drivers-mexico-2024-02-28/)
