Both battery EV charging and swappable batteries are particularly very interesting technologies because swapping is primarily trying to solve the issue of the anxiety of the people for the EVs. Yes, it is true that today EVs are expensive; also banks and NBFCs are not forthcoming to finance EVs due to product risk, credit risk, and the lack of a second-hand market for electric vehicles, shares Pankaj Gupta, Chief Executive Officer, Mufin Green Finance, in an interaction with Srajan Agarwal of Elets News Network (ENN).
What measures and initiatives are you taking to enhance green financing in the country? How can green financing be a step towards sustainable growth of the economy?
The focus of Mufin Green Finance is to provide income-generation loans to users adopting green technology and in a nutshell, we are focusing on the upliftment of the “unbankable” people of society, and creating an impact on the livelihood of the people without hurting the climate. That’s what green financing and impact-based funding are currently is in sync with our business model. Mufin Green has reduced over 100,000 tonnes of carbon emissions through the EVs it has financed. This number was arrived at using the Niti-Aayog calculator, based on the number of vehicles financed and what they would save as carbon credits over their life span.
Your organisation assists financial services in EV charging and swappable batteries. How is technology taking a leap forward in this regard?
Both battery EV charging and swappable batteries are particularly very interesting technologies because swapping is primarily trying to solve the issue of the anxiety of the people for the EVs. Also, the battery-swapping policy rolled out by the govt. will act as a growth driver of Battery/Energy as a Service (Battery-as-a-Service), which will give rise to innovative business models in plugging the gap. EV charging solutions are also coming in as fast charging solutions.
With lithium costs soaring, success will be determined by the development of alternate storage devices. But technology advancements like Smart Battery Management systems and IoT- enabled monitoring will ensure better quality, longevity, safety, and utility of batteries in EV applications. Presently, around 80 per cent of Battery Management Systems (BMS) are imported and the battery swapping policies will open up new avenues to bolster domestic BMS development.
We also think there are going to be many more evolving technologies going forward that will aid the EV ecosystem to expand.
EVs today are still expensive and out of reach for middle-class people. What measures are you taking to make EVs affordable and is the government providing any subsidy regarding this?
To aid in increasing the usage of electric vehicles, the government has increased its subsidy scheme for the purchase of electric vehicles. According to Budget 2022-23, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) earmarked to provide a subsidy of up to INR 2908 Cr, making EVs a lucrative option. We at Mufin Green Finance are working in tandem with government policies and via adopting the phygital approach and combining the strengths of an NBFC and a fintech are helping customers to apply for a loan that is paperless and which is done through a digital platform.
Yes, it is true that today EVs are expensive; also banks and NBFCs are not forthcoming to finance EVs due to product risk, credit risk, and the lack of a second-hand market for electric vehicles. Despite this, our endeavor is always to bring down the cost of EV financing, and with our experience of 6 years in the EV segment as a group, we have been able to keep our net NPAs as less as 1.92 per cent despite the pandemic.
How do you enable income generation for the working segment of B2B fleet operators? How are you providing financial solutions to them?
When we talk about fleet operators endeavor ecosystem and income generation today, there are many fleet operators that we are financing. In the B2B business model, we own the EV assets and provide them to fleet operators on operating lease/financial lease. To enable this, Mufin Green has collaborated with electric two, three- and four-wheeler operators, including Zypp, ALT Mobility, and BluSmart Mobility.
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In a nutshell, Mufin Green Finance provides financing solutions to B2B fleet operators which enables income generation for the working segment under these operators and also ensures that every person who dreams of owning an electric vehicle can get financial assistance without worrying about their credit history or lack of collateral by merging both AI-driven and human- powered credit processes.
Our underwriting management makes us a one-of-a-kind financing company in the EV ecosystem. If we have to talk about Mufin Green’s Impact creation, our prime aim has always been to reduce inequalities and promote entrepreneurship and as part of that, we have managed to increase their earnings from INR 800 to INR 1200 daily which the drivers have been able to utilize towards the upliftment of their family as well as have been able to provide support towards food security and their child’s education. That’s the economics that we are looking to grow it, and that’s how we are leveraging innovative models of leasing and financing to B2B fleet operators to ease the penetration of electric vehicles in the country.
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