Bridging The Funding Gap To The Unbanked Sector Of The Country, Says Karamveer Dhillion, CEO, Perpetuity Capital

                         Karamveer Dhillon, Co-founder & CEO, Perpetuity Capital

1. Kindly walk us through the journey of your company

Perpetuity Capital was established in 2017 as a Non-Banking Financing Company, headquartered in Kolkata. The company mainly provides commercial vehicle financing at competitive rates to the informal sector of the country. Perpetuity Capital enables asset ownership for single owner operators, drivers and underserved entrepreneurs in the auto sector to ensure financial penetration. It has already perforated Rs 25 Million deep into providing services to the benefactors from just Rs 6 Million bootstrapped funding.

2. What is the idea behind this venture? Tell us your business model.

The idea behind the venture was to bridge the funding gap to the unbanked section of the country. The major area of operation deals with the informal sector, whose inaccessibility persists owing to demand for collateral and documentation requirements among other factors. We are targeting to be the primary benefactors for Commercial and Personal Vehicle owners, the worst affected segment due to Covid outbreak.

The business model of the company lies in the  flexibility offered with reasonable interest rates  and quick turnaround time without driving the borrowers/ benefactors into extra hardships. It aims to establish its mark and compete with the incumbent NBFCs and Digital Lending Platforms in providing the best services in the sector. And in process, carving its own niche, that would be an amalgamation of already existing financing systems in the market.

3. Do you think NBFCs can bridge the funding gap in the informal sector?

NBFCs are going to play a vital role in shortening the huge funding gap in the informal sector across the globe. The collaborations of banks and NBFCs have opened up a hassle free path customised financing options to the people who come under the informal sector. However, the problems surrounding the funding gap is giant which requires multiple approaches. The credit enabling system should embrace new credit financing models like TReDS and equity finance to bridge the current funding gap.

4. Is EV financing a huge opportunity in India? What is the present scenario?

The electric vehicle financing in India is projected to reach INR 3.7 lakh crore in 2030 as per a report by NITI Aayog. The financing towards EVs asset and infrastructure is the demand of the current time. But, so far EVs have experienced limited adoption in the market. To elevate its adoption, the government of India has launched various schemes. Faster Adoption and Manufacturing of Electric Vehicle (FAME) is one such scheme which promotes electric mobility in the nation.

Most of the banks and NBFCs are still very hesitant when it comes to Electric Vehicle financing. This is because the electric vehicle industry is at a growing stage and it has yet to go through a complete business cycle.

5. What is the future of NBFCs?

We see a recovery unfolding in the NBFC industry, maybe in the next two or three quarters. NBFCs are in a better position than last year and our view is that assets under management (AUM) this fiscal will have a better growth than the last two years. According to credit rating agency ICRA, credit growth is expected to be approximately 8-10%. We are expecting this as the macroeconomic landscape is improving and GDP is expected to grow at 9.5%. When there is high growth, the need for credit also improves so we expect NBFC growth to inch up this fiscal and as well as in the next. In addition, most NBFCs have also invested heavily in  technology infrastructure, so even if there is a lockdown, disruption in the business will be lower than what it was initially. I think NBFCs are in an evolving situation and the last two years have been challenging, but this year we are looking at a revival.

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