Author: Kushan Mitra
Something I learned recently is that almost 60 per cent of light commercial vehicle (3W/4W) loans in India go into some form of default. While many are resolved, they often lead to the vehicle owners-operator going into a debt spiral - if you have ever been in credit card hell you know what this can mean.
So how does someone resolve this issue? It is not something a traditional NBFC giving a loan to a traditional internal combustion engine 3W can easily do. Because they don’t really monitor the vehicle and usage. So if things are going wrong for the owner-operator they only find out when they default on a payment. Then it is the same call-centre and collection agency process. A high rate of missed payments, unintentional defaults and the need for large support operations — those all drive up interest rates.
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One of Exponent Energy’s long-time investors and supporters is the AdvantEdge venture capital fund run by Kunal Khattar. This fund specialises in investing in green energy and green mobility companies.
“This is proper fintech innovation” he says. “A lower default rate will not only drive more owner-operators to electric vehicles it will also offer them lower-priced loans because of the risk mitigation in the long-run and make them more financially responsible members of society.”
Read full article: dailypioneer.com/news/innovating-vehicle-finance-via-energy