Under the guidance of Niti Aayog, government primer think thank, and RMI as a knowledge partner, Small Industries Development Bank of India (SIDBI) has developed a book titled “De-risking lending for a Brisk EV Uptake: A practical guide on de-risking measures for Electric two- and three-wheelers in India"
The report was released in Washington DC at a World Bank event Transforming Transportation. This was done in the august presence of Dr. V.K Saraswat, Member, NITI Aayog, Shri Sudhendu Sinha, Advisor, Infrastructure Connectivity & Electric Mobility NITI Aayog, SIDBI CMD, Shri Sivasubramanian Ramann, Representatives from World Bank, RMI and international EV ecosystem fraternity. The International Conference undertook deep dive deliberations on EV eco system as also leveraging the Indian experience for replication.
Brief on De-risking report:
The De-Risking Lending for a Brisk EV Uptake report outlines how private sector initiatives can mitigate expected losses for financiers, paving the way for favourable EV lending terms. The identified six de-risking measures to reduce investors’ risks in the EV ecosystem. This practical guide advocates for three fundamental pillars: risk mitigation through financial products tailored to electric two and three-wheelers (e-2/3W), standardised eligibility criteria for OEMs and financiers, and the institutionalisation of de-risking measures (DRMs).
The report details how two types of de-risking measures can reduce risk and redistribute liability to build EV market confidence.
- The first set of measures refers to general measures such as i) building a comprehensive collections system incorporating digital and cash payments and reminders, ii) implementing a robust repossession system for swift EV retrieval, and iii) encouraging customers to opt for comprehensive insurance with EV-specific coverage for enhanced asset protection.
- The second set of measures tailored to the EV market include i) leveraging telematics data to evaluate borrower income potential, track location in case of default, and monitor battery health, ii) developing the secondary sales market, and iii) bolstering product quality assurance through warranties, service contracts, and financial agreements between OEMs and financiers.
Mission 50KEV4ECO, is SIDBI's flagship programme to promote the electric vehicle ecosystem. The salient features of the schemes have been formed after incorporating feedback of the various players spanning across financial institutions, OEMs to end users. Under mission 50KEV4ECO, SIDBI has launched two financing schemes viz. Direct lending to MSMEs and Scheme for lending to NBFCs.
