The electric vehicle financing specialist platform Finayo is developing a Rs 100 Cr fund that will be earmarked for helping commercial electric vehicle (CEV) dealerships in India. An individual close to the matter told Electronics For You team!
Last fiscal year, the company said it financed close to 3,000 EVs, which included electric rickshaws, electric two-wheelers, and some L5 category electric three-wheelers.
“While the situation is easing out, availability of finance for EVs continues to be a major challenge in increasing the adoption of this new technology,”
Via the fund, the company will extend financing options to dealerships having a paucity of funds to procure EV stock from brands. The payment options and interest rates will vary from one dealer to another. A part of the same will also be used for retail financing.
“More than fleet owners, we have been working with private owners,” Brajendra Singh Tomar, Founder & CEO, Finayo had explained earlier. He added that while fleet financing is a good option, rural India is still “pretty much” run by individual and small businesses. Further, unsure about entering the L5 E3W finance business immediately, Tomar says the same will happen soon.
Tomar had also noted previously that first loss default guarantee (FLDG), remains a challenge with newer OEMs, and until that is worked upon, the challenge will not be solved.
“Newer players need to back financers and lenders with a minimum of 5% FLDG. This shows that they have confidence in their product. If they are not willing to offer at least that, the same might indicate the OEM is not confident in their own product,”
Newer players need to back financers and lenders with a minimum of 5% FLDG. This shows that they have confidence in their product. If they are not willing to offer at least that, the same might indicate the OEM is not confident in their own product,”
A joint report by Niti Ayog, Boston Consulting Group, and Asian Development Bank has advised setting up low-cost funds with risk sharing mechanisms / FLDG as one of the potential enablers of availability of finance for EVs in India.
