Why Truck Financing Refuses to be Rushed

As the "two-minute" or the "five-minute" sanctions of vehicles become a trending sales-pitch, the financers of used commercial vehicles, in contrast, are preferring to trade 'stopwatch' for a 'sundial'.

For the  Non-Banking Financial Companies (NBFCs), who currently command a 64% share of the commercial vehicle (CV) financing market, the goal is not instant gratification, but a more measured "morning-to-evening" turnaround.

The Friction of Reality

The reason for this relative slowness is not a lack of digital ambition, but the stubborn reality of the asset itself. Financing a used truck is a hard business that defies the easy algorithms of vehicles in other segments such as in cars and two-wheelers. Unlike a new vehicle fresh from the factory, a used truck requires a physical appraisal to determine its earning capacity. Lenders must verify the condition of the engine, the vehicle's specific usage history, and a mountain of paperwork.

"Two minutes is something we cannot do," explained  K. Vasumathi Devi, Managing Director at IKF Finance, during a recent industry webinar organized by CareEdge Ratings on the topic of 'Commercial Vehicle Financing: Emerging Trends and Future Prospects'. "A few hours is something we are working towards. If a person comes in the morning, can he take the vehicle and go in the evening? That is something where we want to be eventually".

The Digital Roadblocks

While the Indian government’s Vahan database, a centralized digital registry for vehicles, has been a boon for transparency, the digital highway remains under construction. "Not every state is on Vahan,"  Devi noted, pointing out that lenders are still frequently dependent on the paper for verification in several regions.

Furthermore, the underwriting process in this sector is bespoke. Rajendra Kumar Sethia, MD and CEO of SK Finance, emphasized that because these are collateral-based loans, lenders must assess the borrower’s ability to generate income from the vehicle rather than just a credit score. This involves a deep dive into "Middle Bharat"—customers who sit just above the microfinance level and require relationship-based lending that traditional banks often struggle to provide.

The Strategic Anchor

Despite these logistical hurdles, the used CV segment remains the strategic anchor for NBFCs. Used vehicles offer better affordability and a quicker break-even point for the small-scale and single-vehicle operators who form the backbone of Indian logistics. While the industry has been hit by a revolving door of staff attrition at lower levels, firms are investing heavily in machine learning and automation to streamline the "morning-to-evening" process.

As technology catches up with the grit of the road, the goal is to replace human intuition with computer driven efficiency, not to reach the impossible speed of a few minutes, but to ensure that a trucker can arrive at dawn and drive toward his livelihood by dusk.