ADIRA MULLS OFFERING LOANS TO GO-JEK, GRABBIKE DRIVERS
Posted on September 02, 2015 on 10:30:33 WIB
Indonesia's automotive financing giant Adira Finance is exploring the possibility of providing loans for prospective drivers of two popular app-based ojek (motorcycle taxi) firms amid a slump in motorcycle sales, a company executive has said.
Sugianto, head of the national used-motorcycle division at Adira Finance, said on Friday that with the growing popularity of the two app-based motorcycle taxi firms, a larger number of motorcycles would also be needed for their services.
"The apps already have strong brand awareness and we think it is a good idea to offer motorcycle loans for the purpose of working for the would-be drivers, not the companies, because they are basically individual entrepreneurs who run their own businesses," Sugianto said.
Sugianto said the company believed that the rising trend of smartphone apps like Go-Jek and GrabBike had helped provide opportunities for people seeking additional income through innovation-based entrepreneurship.
The two popular applications, Go-Jek and GrabBike, allow users to order an ojek to transport them or to ask the driver to deliver goods. Users can also track an ojek driver's location through the application with a global positioning system (GPS).
Go-Jek and GrabBike have attracted interest from thousands of people wanting to become drivers thanks to the growing popularity of such motorcycle taxis in the city.
Affected by the slump in motorcycle sales, Sugianto said the plan was also part of the company's strategy to diversify its portfolio as the Financial Services Authority (OJK) had allowed multi-finance firms to expand their loans beyond the consumer finance business.
Data at the Indonesian Motorcycle Industry Association (AISI) shows that domestic sales of motorcycles decreased by 25 percent to 3.2 million units in the first half of this year as the country faced weaker economic growth. Sugianto said the company was currently conducting a thorough study on whether the prospective drivers of Go-Jek and GrabBike would choose to apply for loans for second-hand motorcycles rather than new ones to reduce repayments.
"For instance, we can offer working capital loans for used motorcycles if most of the applicants can only afford Rp 200,000 [US$ 14.40] per month, because second-hand bikes cost only around Rp 5 million-Rp 8 million compared to new ones, which have an average price of Rp 15 million," he said.
Sugianto said the company expected that the new loans could start early next year with sharia-based principles in the first phase as a way to balance its portfolio, adding that "we have yet to calculate the target."
According to Sugianto, the new loans are expected to help the company to grow its second-hand motorcycle financing portfolio, which contributed around 25 percent of Adira's total portfolio. The used-motorcycle business suffered a sales decline of at least 20 percent as of July due to weak motorcycle demand, although Sugianto was unable to recall the exact figure offhand.
In the first six months of the year, Adira Finance booked Rp 15 trillion in total financing, down by 11 percent from the same period last year. The company expects to achieve total financing of around Rp 30 trillion to Rp 32 trillion by the end of the year, which has been revised down from an earlier target of Rp 36 trillion.