- Sterling Bank say it has two product to finance E-hailing drivers
CEM REPORT, TRANSPORTATION | Sterling Bank has taken the lead role in supporting drivers with financing to convert their vehicles from Premium Motor Spirit (petrol) to Compressed Natural Gas (CNG).
This is as the bank also stated that it has products designed to finance the E-hailing sub-sector.
This was disclosed by the Group Head of Non-Interest Banking and Sales of Sterling Bank, Garba Mohammed, at the Executive RoundTable Discuss (ERD) hosted by Continental Economic Magazine.
Mohammed said, Sterling Bank through its product All Drive had funded several drivers to go into the E-hailing business.
“We have funded a lot of drivers for such businesses.
“Our bank has a particular product we call All Drive which is specifically tailored towards funding both partially used vehicles and those used in E hailing.
“We are currently working towards financing not only the vehicles, but we are also working in financing drivers that want to convert their vehicles from the fossil fuel driven engine to CNG driven engine and for those that want to buy freshly CNG driven cars.”
Since the complete removal of the fuel subsidy, he disclosed that Sterling Bank is researching solutions to lowering the cost of doing business for E-hailing drivers and other drivers.
“Subsidy came with multiple cost development. So we have identified that problem and we try to solve it not only by financing vehicles for the riders but for also those that already have vehicles and wish to convert. They will also have funding to convert their vehicles from fossil fuel-driven engines to CNG engines.
“That definitely is going to bring down their cost of doing business.”
While noting that CNG is cheaper than petrol, he added that Sterling Bank also had a product that provides non-interest financing to the E-hailing sub-sector.
He explained that Sterling Alternative Finance does not charge compounded interest on financing vehicles for E-hailing business.
“We also have Sterling Alternative Finance. It’s the non-interest banking arm of Sterling Bank that finances those vehicles without charging interest. I’m not saying it’s a free venture it is not a charity organization. What we do is we will not charge compounded interest in our financing.”
Responding to if the financing is accessible and if the set criteria can be met by everyone, Mohammed said there are eligibility criteria that must beet before financing can be approved for an individual.
Mohammed stated that there are eligibility requirements that must be reached before financing can be approved for a person in response to the questions of accessibility and whether or not the established standards are achievable by everyone.
He explained that the banking sector follows certain guidelines before approving financing to individuals.
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“You have to show competence, you have to show capacity, to show some kind of integrity. If you have a bad credit report, the bank is mandated not to finance you. If your cash flow is not sufficient, you cannot demonstrate sufficiency that you will be able to satisfy the periodic payment, the bank will decline.”
“Our essence is to finance if we were able to, ascertain the capacity and the debt service coverage or coverage ratio, vis-a-vis your income we just go ahead and finance you.
He added that the CBN has put in implace certain policies that will allow banks to recover their financing loans from other banks of the loanee.
“With the advent of BVN 2.0 that the CBN introduced, where a debtor can be debited from anywhere as long he has an account in any of the banks,”
Executive Round Table Discuss is a quarterly program hosted by Continental Economic Magazine (CEM), where experts discuss burning issues that affect the economy and proffers solution to them
The program is streaming live.
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