NEW DELHI, APR 13, 2023
Realising that access to adequate finance including competitive rate of interest is a challenge faced by MSMEs and NBFCs catering to EV ecosystem, Small Industries Development Bank of India (SIDBI) on Thursday announced Mission 50K-EV4ECO to strengthen the electric vehicle (EV) ecosystem including uptake for two-wheelers, three-wheelers and four-wheelers through direct and indirect lending support for EV companies.
Under the guidance of NITI Aayog, the Department of Financial Services (DFS), MoF (Ministry of Finance), and the government of India (GoI), SIDBI’s Mission 50K-EV4ECO intends to unlock the market by providing better financing terms and understand other solutions needed to address the financing issues.
This scheme is the precursor to the EVOLVE scheme by SIDBI-World Bank. The pilot scheme has two components – Direct lending and Indirect lending. Under direct lending, SIDBI will directly give loans to eligible MSMEs (including aggregators, fleet operators, and EV leasing companies) for the purchase of electric vehicles and the development of charging infrastructure, including battery swapping. The Indirect scheme targeted at NBFCs (including small unrated/ focused /emerging NBFCs actively engaged in EV financing), shall reach out to the last mile by inducing access to funds as also reducing landed cost.
Sharing further details on the announcement, SIDBI CMD Sivasubramanian Ramann said, “In line with the national mission of EV30@30 SIDBI has adopted EV as priority and by launching mission 50K- EV4ECO we intend to promote the entire EV value chain. This pilot shall be followed by scaling up support to the eco system from multilaterals support. MSMEs, aggregators and other crucial actors of EV value chain have been facing challenges in convincing financial institutions to lend them. Similarly, the channelising agencies are also facing speed breakers. NBFCs are playing an important role in the enterprise growth strategy of SIDBI. They have shown willingness and ability to reach the bottom of the pyramid businesses, especially in credit deficient geographies, adoption of innovative and nimble credit delivery models and understanding of the local ecosystem. Electric vehicle financing is predominantly being done by small/ unrated NBFCs. These NBFCs have good knowledge of the EV sector.At present, it is not possible for these NBFCs to cater to all MSMEs requiring financing for an electric vehicle for their day-to-day operations or commercial use.We at SIDBI realise the need to give it a developmental push thus giving fillip to the national agenda of Carbon neutral nation.”
NITI Aayog Adviser (Infra & e-mobility) Sudhendu Sinha said that SIDBI taking lead in launching the Mission 50K-EV 4 ECO scheme is a step in the right direction. “This shall enable access to affordable financing for electric vehicles. We look at SIDBI to prioritise the 3-wheeler segment. I am sure these foot-on-the-ground pilots shall enable quick replicability and scalability through multilateral support. With a special scheme for NBFCs, I am confident that the mission shall kindle rural India to start its EV transition journey.”