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 last November, which offered some drivers and delivery riders cash advances based on their previous earnings.

Following the ST report, some MPs voiced concerns in Parliament about whether such programmes were a form of money-lending.

Grab introduced 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 it had dropped the programme to "explore improvements... 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.

When asked by The Straits Times on Friday, the ministry did not elaborate on its findings on the programme. On the question of whether Grab would be allowed to restart it, a ministry spokesman did not specifically reference Grab, but said the onus was on businesses to ensure their activities are lawful. "When they have reason to believe their activities may constitute money-lending, they should obtain a licence or exemption in order to carry on a business of money-lending unless they are excluded from the Moneylenders Act."

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

It said 98 per cent of those who took up the cash advances were able to repay with their earnings. Those offered the option said they welcomed it, but experts said such an arrangement was uncommon in Singapore.

Labour MP Zainal Sapari said he was glad that Grab had decided to discontinue the scheme.

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

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