TOKYO -- Aeon Financial Service began offering loans for buyers of motorized tricycles in the Philippines this month.
The Japanese lender is partnering with Global Mobility Service, a Japanese startup. They kicked off the service in central Manila, beginning with 40 tricycles. For this year, the duo plan to offer loans for up to 100 vehicles a month.
A special device with a GPS tracking system is attached to the tricycle when the borrower signs the contract. The vehicle's engine will stop if payments are late or if the device is pulled off of the vehicle. The tracking device will make it difficult for borrowers to flee without making payments.
Low-income people are often excluded from financial services because they lack regular jobs or a bank account. Such services targeting the poor are referred to as microfinancing. These tricycle loans could help individuals to pull themselves out of poverty by starting a taxi service, for example.
As soon as this fall, Aeon Financial Service will test the service in Indonesia, with plans to eventually expand it to Malaysia, Cambodia and Vietnam as well. The company also aims to provide loans for cars and agricultural machinery.