Wednesday, July 17

We aim to manage an AUM of INR 200Cr in 2024-25 – Nitin Sabharwal, Founder & CEO, EV Finserv

Q. Share with our readers the inspiration behind starting EV Finservand its vision of improving customer’s lives through financial inclusion?

Deepak Srivastava- Co-founder, EV Finserv

After working in the banking and financial services industry for over 25 years, I strongly desired to start a social enterprise that would create micro-entrepreneurs and positively impact society. With my co-founder, Deepak Srivastava, we focused on green asset finance as we saw a great opportunity in this sector. In April 2023, we launched EV Finserv, a platform that has both a digital and physical presence, using the BC model and partnering with NBFCs.

Our platform lists products, OEMs, dealers, locations, and client segments so NBFCs and banks can start operations per their preferred structure without building new infrastructure. EV Finserv will distribute, monitor, and collect on their behalf. Our entire process follows an assembly-line approach to ensure operational excellence. As we entered the market later than others, we had the advantage of hindsight, which allowed us to approach things differently, including cost structures, OEM partnerships, and employee compensation.

We aim to manage an AUM of 200Cr in 2024-25, a significant increase from the 25Cr we managed this financial year. Additionally, we are the largest Operating lease player in the E Rickshaw segment.

Q. Can you elaborate on how EV Finserv is cutting-edge in the fintech space? What distinguishes EV Finserv from other financial institutions in promoting financial inclusion?

We have fully embraced digital processes for our business operations. However, we have also been developing our technology as we found the existing products unsatisfactory.

At EV Finserv, we consider the efficient and ethical collection of client loan repaymentsto be a crucial aspect of our business. Therefore, we establish a collection infrastructure with dedicated staff and effective processes before entering any new market. We also assign an additional resource for every 75 clients to ensure we collect timely payments.

We have also recently signed an MOU with “Makemyday” Israel to bring ‘SMART” solutions for EV Fleets in India.

Q. Could you share more about the underprivileged and underserved segment that EV Finserv targets? How has lending for income-generating assets, like E Rickshaws, contribute to the empowerment of this segment?

Throughout history, the market has been the most powerful force in creating opportunities and lifting people out of poverty. E-rickshaws are an instant source of employment generation and provide financial empowerment with sustainability. On average, our clients earn around 13-15K per month after paying the installments, and they can stay with their families instead of moving to a larger city. We see a similar empowering tool in EV two-wheeler finance, so we are entering this segment.

The younger generation is predicted to have a greater demand for consumer products and an overall increase in their needs.

We aim to become our client’s preferred partner for all household credit needs, opening up profitable cross-selling opportunities for EV Finserv.

Q. Could you explain the multi-layer collection approach that EV Finserv employs to ensure best-in-class collection efficiency? How does this approach address the unique challenges of the underprivileged segment?

We currently have a collection efficiency ratio of over 110%. To minimize lending risks, we have taken proactive steps in challenging areas. Our underwriting process includes a team member’s physical visit and geo-tagging of the borrower’s residence. In addition to the bureau and regular credit checks, we assess the borrower’s household income to determine if they have additional funds in case of unforeseen events like accidents. Furthermore, we prefer the borrowing decision to be a family decision instead of an individual one, which can result in higher rejection rates but helps us maintain an excellent collection track record.

Currently, EV Finserv s operates in 66 districts in Uttar Pradesh, 21 districts in Bihar, and 12 districts in Madhya Pradesh, with dedicated staff for collections in each location.

Our clients have various payment options, including weekly, fortnightly, etc. Unlike other lenders, we discourage dealer involvement in collections and penalize any attempts to interfere. Our collection team meets with clients several times monthly to prevent potential delays.

From April 2023 to December 2024, we disbursed 1,100 cases with an AUM of approximately 12 Cr. During this period, we experienced zero NPAs and anticipate maintaining strong collections in the foreseeable future.

Q. What are the future plans and expansion strategies for EV Finserv? How do you envision the company making a more significant impact in the coming years?

We are a highly focused organization that values operational excellence. We are ambitious, available, and comfortable operating in markets and geographies that are perceived as challenging. Per our first-year business plan, we aim to achieve a managed Asset Under Management (AUM) of over 25 Crores by March 2024. We were fortunate to have recruited our first 20 employees from our past associations, which allowed us to scale quickly and efficiently. Currently, we have a field force of over 120 employees.

We have established partnerships with over 35 OEM E Rickshaw companies and maintain good relationships with more than 350 dealerships located in Uttar Pradesh, Bihar, and Madhya Pradesh. We plan to expand our operations to Orissa, Jharkhand, and Assam within 3-4 months. This will enable us to disburse over a thousand E Rickshawsmonthly by July 2024.

Additionally, we have launched our EV Two-wheeler product and expect it to scale within this financial year.

We have also piloted a battery leasing program and are pleased with the response. This significant product can be our biggest revenue generator in the next financial year.

Furthermore, we are working to address the industry’s most prominent pain point, the secondary market. Currently, we manage a fleet of over 350 vehicles under operating lease, and we expect this number to increase tenfold in the next financial year. This will also enable us to deploy repossessed assets if necessary.

By September 2024, we plan to open 40 physical branches out of 150 locations to cater to all our products. These branches will disburse an average of 40 lakhs each per month.

Q. What challenges has EV Finserv faced in its journey, and how were they overcome?

We have been lucky to have the support of many well-wishers who believed in our vision of creating a green asset finance business. My co-founder Deepak and I are extremely grateful to the initial teams who trusted and joined us on this journey despite having comfortable jobs.

We have also established partnerships with several NBFCs, enabling us to reach a monthly disbursement run rate of 5 crore. With our progress, we aim to increase monthly disbursements to 10 crores by April 2024 and eventually 20 crores by September 2024.

We achieved profitability in November 2023 and plan to scale the business to achieve over 5% ROA in the next fiscal year.

Q. Can you share any success stories or testimonials from individuals whose lives have been positively impacted by EV Finserv’s initiatives?

It is an incredibly rewarding experience to see our clients generate income for their families and contribute to the local economy. This improves the quality of life for their children and helps break the cycle of poverty within their family, paving the way for new opportunities for future generations.

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