If you are a regular user of Uber or Ola, you would have heard the driver asking you if you would pay for the trip by cash rather than use your credit card option. Or, at times, the driver would have cancelled the booking because you were going to pay by card. In these days of high fuel prices, the drivers need the cash to pay for their fuel.

But now they no longer have to worry about not having cash in their pockets to pay for the fuel or for other sundry expenses that they have to meet.

A Pune-based fintech start-up, Bon Fleet Solutions Pvt Ltd, has come up with a solution for these cab drivers and other gig economy workers. It gives them a credit card, called a Bon card, and has tied up with non-banking finance companies that are willing to give credit to these cardholders.

According to Bhasker Kode, Founder, Bon Fleet Solutions, the idea for the venture came to him when he was riding in a cab. He was a frequent user of Uber and Ola cabs and had heard many drivers complain to him that though they were earning as much as a software engineer starting out on his or her job did, they were still not eligible for a credit card, something that the software engineers got as soon as they got the job.

That was the trigger for Bon, says Kode, an engineering graduate from Anna University, who incorporated the company in 2016. Bon’s software platform allows for instant matching of credit by the NBFCs it has tied up with, once a Bon card is issued to a gig economy worker. It has tied up with about 3,000 NBFCs, and it has an arrangement with Federal Bank and YES Bank for the credit cards. The credit cards are issued by MasterCard and shortly Bon will have RuPay cards too. “Our platform allows for real-time auction among NBFCs for sanctioning the credit,” he adds.

Short-term credit

Bon carries out the KYC requirements before the cards are issued to its customers. To sign up for a Bon card, the workers can download the app on their smart phone or visit a retail outlet. The idea is to offer short-term credit to the gig economy workers and since its launch last year, it has issued more than 5,000 cards and processed more than ₹6 crore in transactions and repayments. In September, Bon raised ₹7.8 crore in a seed round led by impact investment venture capital Omidyar Network with participation from early-stage investment firm Axilor Ventures and Better Capital’s AngelList India Syndicate. The company will use the money to increase its partnerships with banks and NBFCs and start operations in 25 cities over the next 18 months. It is now present in seven cities, including Bengaluru and Pune.

The credit available on a Bon card ranges from ₹500 to ₹10,000 depending on the customer’s profile and needs. The cards can be used at a large number of merchant establishments. Bon constantly updates the credit profile of its customers, thanks to which they have a dynamic credit limit. “We want to get to 25,000 cardholders by end of next year,” says Kode. Bon charges a subscription fee depending on the plan chosen and also earns from the various value-added services it offers its customers. According to Kode, the interest charged to the customers ranges from 18-24 per cent and 98 per cent of the credit is repaid within 60 days. The write-offs are under 1 per cent, he adds.

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