TOKYO Getting a car means freedom to get around, and for many, freedom to earn a better living. Getting a loan to buy one, however, is not always that easy, particularly in emerging economies.
Disabling a vehicle's engine might not seem like the most intuitive way to solve the problem, but it is key to a system developed by Japan's Global Mobility Service, which has helped hundreds of Filipinos get their hands on a vehicle.
Before setting up Global Mobility in 2013, Tokushi Nakashima had struggled to sell three-wheeled electric vehicles in the Philippines. More often than not, people told him they could not buy one due to rigorous screening of loan applications.
The information technology venture developed the Mobility-Cloud Connecting System, which uses a remote-control terminal installed in users' cars. If the user fails to keep up with repayments, the engine is disabled at a time when it is not running.
The service is designed to get more people behind the wheel by making financial institutions less reluctant to issue loans and leases. Global Mobility said the mechanism motivates borrowers to repay their debt.
Japan's SBI Sumishin Net Bank uses the MCCS for its auto loans. It is also used to lease about 300 three-wheeled taxis in the Philippines. The lenders say there have been no bad debts so far and Global Mobility plans to expand the service to four-wheeled cars overseas.
Shaped like a slightly thicker version of a smartphone, the MCCS can be operated via low-speed mobile phone networks and uses GPS navigation to locate each vehicle. It can disable the engine wirelessly and turn it back on once a payment has been confirmed. Trying to forcibly remove the device also results in the engine being shut down.
NEW MARKETS By April, it will also become available in Thailand and Indonesia, having gone through local verification tests last year. The service will not only be available in Bangkok and Jakarta, but also other cities and rural areas. It will cover new and used cars as well as farm and construction equipment. The two countries' emerging middle-class are expected to be the main customers.
While Global Mobility owns the cars it provides customers in the Philippines, in Thailand and Indonesia it plans to only offer the remote-control service.
The three-wheeled taxi business in the Philippines charges users around $35 a month, but rates for Thailand and Indonesia have not been disclosed.
By teaming up with power companies and telecommunications providers, the service will allow users to pay their monthly bills at the cashier windows where they pay their utility bills -- the same method used in the Philippines.
For consumers who would not otherwise qualify for loans, the benefits of being able to purchase a car with the system are enormous. According to Global Mobility, 26 million credit checks a year result in car-loan applications being turned down in Southeast Asia and India -- four times the number that are approved.
Global Mobility wants to absorb some of this demand by increasing the number of cars provided through the service to 100,000 vehicles by the year ending March 2020.