SINGAPORE - Grab has dropped a programme offering cash advances to its drivers and riders, about three months after the Ministry of Law said it was looking into the initiative.

The Straits Times reported on the programme in November, which offered some drivers and delivery riders cash advances based on their previous earnings.

Following the report, some MPs had voiced concerns in Parliament about whether such programmes were a form of moneylending.

Grab piloted the programme in 2018. Those who took the advance could repay it from their earnings over about six months.

Grab offered advances that went as high as $8,900. No interest was charged, although there was an administrative fee that could go as high as 8 per cent of the amount advanced, according to pictures circulated among drivers and riders

A Grab spokesman said on Thursday (Feb 20) the move to drop the programme was to "explore improvements that can be made to ensure the needs of our driver- and delivery-partners are best met".

The Ministry of Law said in November that it would work with relevant agencies to determine the applicable legislation, if any, for the programme.

In response to queries from The Straits Times on Friday, the ministry did not elaborate on its findings on Grab's programme.

When asked whether Grab would be allowed to restart it, a ministry spokesman did not specifically refer to Grab, but said the onus was on businesses to ensure that their activities are lawful.

"When they have reason to believe that their activities may constitute moneylending, they should obtain a licence or exemption in order to carry on a business of moneylending, unless they are excluded from the Moneylenders Act."

Grab said the programme was offered to only a select group of drivers and riders, and it aimed to help them in situations like family emergencies.

It also said that 98 per cent of those who took up the cash advances were able to repay Grab with their earnings.

Those offered the option had said they welcomed it, but experts said such an arrangement was uncommon in Singapore.

Labour MP Zainal Sapari, among those who voiced concerns about the programme, said he was glad Grab has decided to discontinue this scheme.

"Making cash easily available may encourage impulse buying and this may not be good for the borrowers.

"Moreover, the uncertain income from Grab work may make it difficult for borrowers to make regular payments," added Mr Zainal, who cited the coronavirus outbreak as an example of how drivers could have their income unexpectedly disrupted.