Strengthening the car finance sector with digital tools and technology, says Karamveer Dhillon

KaramVeer Dhillon, Co-Founder and CEO of Perpetuity Capital shared his business trip in an exclusive interview with Outlook India. He also added specific knowledge in the field of commercial vehicle financing and electric vehicle financing.

Tell us about the business model of the company? What are the services you offer?

Perpetuity Capital is a Non-Bank Financial Corporation (NBFC) that mainly provides commercial vehicle financing to the population without a bank account at competitive interest rates. The company borrows from banking and lending institutions and further lends retail loans for small tickets. The focus remained on Commercial Vehicle (CV), Personal Vehicle (PV) and used PV loans. Perpetuity Capital offers loans at reasonable interest rates, has flexible permanent loans that reduce the EMI burden on first-time borrowers and fast loan processing and repayment time (48 hours) with the help of our technology and built-in APIs that verify documents immediately. It aims to consolidate its brand and compete with established NBFCs (Manappuram Finance, Tata Capital, Shriram Transport Finance, etc.) and Digital Lending Platforms to provide the best services in the industry. And in the process, carving out its own position, this would be a merger of already existing financing systems in the market.

When it comes to commercial vehicle lending, there are several players in the market. What is the competitive advantage that Perpetuity Capital has to offer?

Perpetuity Capital aspires to become a one stop shop for vehicle financing in India and ultimately collateral financing in India. The platform has a hybrid model compared to NBFCs whose model is completely offline and based on brokers. We have a combination of offline and online loans and we go far beyond traditional data points (IT refunds, bank fingerprints) when we take out a loan to understand their ability to service a debt. The company looks forward to streamlining and simplifying the lending process to finance and refinance the automotive industry.

How do you verify the creditworthiness of borrowers, especially small businesses?

Perpetuity Capital does not provide loans to SMEs / Businesses, although we do lend to SMEs for their logistics and mobility needs. We measure a business’s creditworthiness by looking at recurring and contractual revenue to better understand its ability to repay. Specifically, we examine the age of the vehicle, the age of the borrower in relation to the department in which he works, the size of the borrower’s fleet, demographics, dependents, etc. before creating a credit profile.

How are you so uniquely positioned to lend at a competitive interest rate?

Competing at a competitive rate depends on the cost of your NBFC venture capital. The lower your capital cost, the higher your interest rate margins. Initially, we started the company and managed to raise 50 lakhs in unsecured debt financing. Going forward, we seek to raise both equity and debt financing to increase our loan portfolio.

How do non-bank lenders deal with electric vehicle financing?

Electric vehicle financing is still in its infancy, with most banks and NBFCs still hesitant, as the electric vehicle industry has not yet gone through a full life cycle. Therefore, we do not know how many aspects of this, in particular, the resale value of EVs can play. We also look forward to developing the space for two-wheelers and three-wheelers that will further enhance disbursements. EV OEMs are currently operating their own end-user lending systems, as customer awareness and adoption will increase, as will the ways in which customers can obtain loans. As non-bank lenders ourselves, we see this as a rapidly growing opportunity in the EV commercial space. Our CV clients will migrate organically to CEV and so will our business. That said, we are optimistic that this will be a huge chunk of the pie as EVs become mainstream and India restricts the use of motor fuel vehicles.

What are the company’s goals for next year?

Perpetuity Capital is currently working to strengthen its customer base. In the coming years, we look forward to incorporating new technology into our platform and launching our application. The application will be available on both Android and iOS. At the same time, we are working to increase our loan portfolio to over 50 CR. This also includes our plans to expand to different locations across the country.

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