Aeon gives loans to ride-hailing drivers in Indonesia to create jobs

20, Oct. 2018

JAKARTA, NNA - Japan's Aeon Financial Service Co. is providing potential ride-hailing service drivers with auto loans in Indonesia, aiming to offer unemployed people job opportunities.

The company said Thursday it has teamed up with Global Mobility Service Inc., a Tokyo-based fintech venture, to load vehicles with an internet of things device to ensure repayment while financing candidates to buy cars.

Local subsidiaries of the two firms -- PT. Aeon Credit Service Indonesia and PT. Global Mobility Service Indonesia -- are undertaking the financing program, also intending to reduce air pollution by facilitating the use of low-emission vehicles in the country.

The cloud-based mobility connecting system used for the remote-controlled device was developed by the fintech venture, whose shareholders include trading house Sumitomo Corp. and Japanese auto parts giant Denso Corp.

If drivers become delinquent or fail to repay lending or try to illicitly take away the device, the program operators activate a system to prevent engine from starting.

In Southeast Asia's most populous nation with over 260 million people, new vehicle sales, including those of second-hand cars, topped 3.5 million in 2017, but the car ownership ratio is still low at 5 percent as many people remain unqualified for auto loans due to a lack of adequate credit standing, according to a joint statement by the operators.

Amid growing use of ride-hailing services in Southeast Asia, the two Japanese firms began cooperating for a similar financing scheme in the Philippines in July last year, with the number of tricycle taxi drivers using it exceeding 1,000.

They also started offering loans to taxi drivers in Cambodia in January this year. Accumulated auto loan contracts in the two countries total a few thousand, with the delinquency rate at less than 1 percent, according to Aeon Financial Service.

The financial service arm of Japanese retail giant Aeon Co. is planning to extend such lending to other Southeast Asian countries. (NNA/Kyodo)