Ola, India's biggest taxi app and Uber competitor, will start offering loans to drivers to help them fund anything from weddings to home renovations, the company said on Friday.
The start-up, which is valued at $5 billion, struck a partnership with Indifi, which typically allows small enterprises to gain access to debt financing. Drivers will be able to apply for loans for their "personal needs."
Ola has launched the scheme in the cities of Pune and Bangalore and plans to partner with more financial companies in the next six months to expand the service.
The partnership with Indifi will allow drivers to get a loan within three or four working days. Ola currently offers drivers a lease program for cars in which they pay a monthly installment to drive it. Drivers who have been with Ola for more than six months, and those that have paid a minimum of eight monthly installment towards the car, will be eligible for Ola's new loan program.
"With continuous access to demand on the Ola platform, they are able to make more revenue for themselves, growing professionally and personally," Pranay Jivrajka, chief operating officer of Ola, said in a press release.
"Access to financing for personal needs is essential to help them achieve their goals and with an improved repayment capability, this partnership makes it completely hassle free for drivers."
The news comes amid a land grab for users in the taxi industry and as Uber, a U.S. taxi app reportedly valued at $50 billion, embarks on an aggressive push into the Indian market. Earlier this year, Uber said it was to invest $1 billion in India to expand services in the country.
Ola is the dominant player in India and is trying to fend off this threat. Earlier this year it introduced a scheme to allow its riders to pay drivers in cash because of the lack of bank accounts held by people in India, a move that Uber followed shortly after.
The initiative to offer loans is a bid to make drivers stick to working for Ola for longer, allowing the start-up to meet the increasing demand for on-demand taxi services.
Earlier this year, Starbucks launched a loan program in the U.K. to help its staff put down a deposit on a house.