RevFin Financial Services Limited is a financial technology company providing an advanced digital lending platform that makes getting a loan convenient and accessible for their customers. The Delhi-based startup is now training its guns heavily on vehicle financing of Commercial vehicles especially green and environment-friendly ones. While talking to Avishek Banerjee, Sameer Aggarwal, Founder of, RevFin reveals that it aims to finance 3 lakh electric vehicles by 2024. Below are the edited excerpts:
Firstly, please tell us about your contribution to the auto industry?
We are a pureplay fintech company and have a digital lending platform, through which disburse loans to people who are financially excluded such as those who don't have a CIBIL score or don't have bank transaction data, or (for those who) don't have proper education and so on and so forth. The primary segment that we are focusing on, at the moment, is electric vehicles. So, we finance a lot of electric 3 wheelers, e- rickshaws, electric two-wheelers etc. So that's sort of our interface with the auto industry.
What are your views on the vehicle scrappage policy announced by the central govt?
If the policy is implemented the way it has been designed, then the impact on the auto sector is going to be huge. It is going to lead to a lot of new vehicles, obviously a lot of old vehicles will be scrapped and a lot of new vehicles being bought. And when new vehicles are being bought it will be a combination of electric vehicles. I think electric vehicles will see a significant jump especially in the commercial cargo space. There will also be a jump in CNG vehicles as well.
In terms of what you are talking about (is the) scrapping the vehicles (and) yes it will happen in 2023-24. But you know the groundwork for setting up infrastructure for it will start this year only. For the scrappage policy, the govt will be setting up scrapyards, fitness centres, etc., which will start in 2021 only. So even if we go by the policy itself, the impact on the auto industry is going to be quite significant because a huge number of vehicles and almost half (of) the commercial vehicles will need to be replaced. Having said that, there is of course a lot of pushbacks happening, especially from the commercial vehicle operators’ end as they will obviously have to replace a lot from their fleet, which requires a lot of additional costs. So, I'm not sure whether the policy will be implemented in its full aspect. There may be certain changes and certain dimensions along the way.
The government is also talking about imposing green cess on re-registration of existing ICE vehicles. Will that further boost the volumes of new vehicles?
Ultimately, the intention of the policy is to sweeten the deal and incentivise people to move towards cleaner fuel vehicles. So that is certainly the intention behind the policy. But having said that, ultimately when you scrap your vehicle how much money do you get for that vehicle? So there are two parts for this. First is when you scrap the vehicle you get certain realisation for that as you get some money for scrapping the vehicle. The second part of the benefit is that when you go to buy a new vehicle there are certain benefits you get. Now from the standpoint of buying new vehicles, you are absolutely right. There is a huge incentive given in terms of relaxation on tax, registration fees and discount on the price of the vehicle and so and so forth. But consider a scenario where I have a vehicle and you know when you scrap it you only get 5-7% of the value of the new vehicle back. Then ultimately a capital investment has to be made by a business to buy a new vehicle.
If the vehicle that is being scrapped is not fully depreciated by that time and the value of that is not being utilised by the business then it is going to be a cash outlay for them. And not all businesses are going to be ready for that cash outlay just to save on or getting a discount on new vehicles. So, incentives are there (and) I agree. For people who really want to replace their vehicles, it's very good and they can scrap their vehicle and get a new one for a much lower cost. There are a lot of people who wouldn’t want to do that.
Lastly, what contribution do you want to make towards promoting sustainable mobility or for that matter green mobility?
Our vision is to finance about 300,000 electric vehicles in the next 3 years