Business

BoB signs MoU with ten cos to loan Rs 500 crore

Mumbai, Jul 21 (Agencies) | Publish Date: 7/21/2018 11:43:39 PM IST
State-run Bank of Baroda signed a Memorandum of Understanding with ten companies including Uber, Oyo, Lava and Flipkart to provide loans to members in their supply chain like drivers and retailers in its efforts to raise its exposure to small enterprises. 
“We want to target around 5,000 micro-entrepreneurs and spend at least Rs.500 crores in 2018-19,” said P S Jeyakumar, CEO of Bank of Baroda. The bank will sanction these loans online, instead of through branches. “The bulk of loan sanctions will be automated.” 
The bank will finance Oyo’s hotel-partners, motorcycles for delivery boys at food-delivery company Swiggy and e-commerce logistics companies, and car drivers at cab aggregators such as Uber. 
BoB said that defaults by some drivers at Uber doesn’t necessarily mean that all loans are risky. “Every business proposition has some inherent risk,” said Jayakumar. “Using lots of data and AI, we want to find people who are statistically more likely to pay back loans.” 
Since subsidies and incentives for Uber drivers had been slashed, those now becoming Uber car-owners would be a lot more cautious and realistic about outcomes. Mobile phone maker Lava’s retailers will get finance for their working capital from the bank. Ritesh Suneja, Chief Financial Officer of Lava said, “we’re mostly present in non-metros. So most of our retailers don’t have a credit history. But since all sales data is available online, it’s easier to monitor. Action can be taken if sales drop.” The bank has also tied up with the Dalit Indian Chamber of Commerce and Industry (DICCI) to provide loans to SC/ST entrepreneurs for owning LPG tankers, subject to them getting a Letter Of Intent from an oil company. 
Milind Kamble, DICCI Founder Chairman, said, “Loans of Rs.40 lakh each at 9% interest rate will be given to up to 500 SC/ST entrepreneurs through the Stand-up India scheme. That will amount to Rs.200 crore. 
 

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