Consumer lending platform RevFin in partnership with electric vehicle fleet operator SmartE has raised an undisclosed amount in a funding round from Shell Foundation. The fresh capital will be utilised for offering loans to electric three-wheelers operating on SmartE’s platform in Uttar Pradesh.
Revfin, which targets financing for excluded and underserved segments, will be able to enable asset financing to about 800 drivers in Lucknow, Allahabad and Varanasi. The loans will be disbursed without any other guarantee from OEMs/dealers and at interest rate of less than 25%, but at a loan to value ratio of 75%.
Founded in 2000 by oil and gas major Shell, the Shell Foundation is a UK-registered charity. The foundation also operates the POWERED Accelerator to fund women-led businesses in the energy space.
To manage risk of bad loans, the asset financing model will be running a checklist based on proof points including guaranteed income, assessment lending viability without first loss guarantees (FLDG) from dealers post the pilot stage; possibility of having on-ground physical collection teams and reduced interest rates.
''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,'' Aparna Mangla, India regional manager at Shell Foundation said in a statement.
In the near future, Revfin wants to incentivise larger banks/NBFCs for entering the space and partnering with the startup at lower interest rates to manage the risk of this sector.
“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,” Sameer Aggarwal, founder of RevFin, said.
Currently, SmartE offers passenger and logistics mobility solutions across nine cities in the country. It claims to have delivered more than 60 million zero-emission rides across the country and has also built, what it says to be, the largest EV and battery charging infrastructure in the country.