To accelerate adoption of electric mobility solutions among the low income consumers from tier 2 cities of eastern Uttar Pradesh, RevFin, a digital consumer lending platform has recently received funding from Shell Foundation in partnership with leading electric vehicle operator, SmartE.
The funds will be utilised for extending new loans for electric 3-wheeler operating on SmartE’s platform. The project will enable asset financing of 800 drivers impacting 17,000 lives in Lucknow, Allahabad and Varanasi without any other guarantee from OEMs/dealers and at interest rate of less than 25 percent as well as more than 75 percent Loan to Value ratio.
Shell Foundation (SF) is a UK-registered charity, founded by Shell in 2000, that supports innovative business solutions and enterprise models that can contribute towards sustainable development goals, thereby achieving financial independence and operating at scale. RevFin focuses on the financial inclusion of lower-income customers while SmartE is a leading electric vehicle platform across both passenger and logistics segment.
The agreement between these three organisations demonstrates a viable asset financing and operating model that will cater to low-income consumers from tier 2 cities and drive contribution to the growth of the electric mobility sector in India.
The partners say the viability of the asset financing model will depend on the generation of proof points on default rates and risk mitigation through guaranteed incomes; assessment of whether lending is viable without first loss guarantees (FLDG) from dealers post the pilot stage; possibility of having on-ground physical collection teams and reduced interest rates.
Further, as a demand aggregator and technology platform SmartE will enable increased earning opportunities to the drivers performing passenger mobility as well as delivery services enrolled on their platform. The vehicles financed by Revfin with support from Shell Foundation will leverage SmartE’s network of EV charging and battery swapping infrastructure as well as its technology platform.
Speaking on this strategic collaboration, Sameer Aggarwal, founder, RevFin said, “We are very excited and positive about this project with Shell Foundation. Our objective is to leverage their infrastructure to accelerate the adoption of e-mobility solutions for low-income consumers at scale. By demonstrating a viable and scalable business model with the right set of systems and frameworks, we intend to attract more capital to the sector. That said, in the near future, we want to incentivise larger banks/NBFCs for entering the space and partnering with Revfin at potentially lower interest rates to manage the risk of this sector. Meanwhile, by establishing a partnership with a demand aggregator platform like SmartE, we intend to increase the income potential for drivers amid the ongoing impact of the pandemic. SmartE will complement Shell Foundation’s funding by setting up adequate energy solutions (battery as a service and charging stations) to increase incomes and demand.”
Aparna Mangla, India regional manager, Shell Foundation said ''Shell Foundation is pleased to partner with Revfin and SmartE to enable higher adoption of cost-competitive 3-wheeler clean mobility solutions for lower-income communities in India. First mile and last mile mobility is fundamental to economic and social development, and we believe that business solutions are best placed to provide lasting change.''