How AMU Leasing Used AI For EV Finance, Maintain 0.3% NPA

Mukul Yudhveer Singh
05 Nov 2022
09:30 AM
2 Min Read

The company has financed over 1,500 electric vehicles while maintaining an NPA rate of 0.3%

Nehal Gupta, Director of AMU Leasing
Nehal Gupta, Director of AMU Leasing

Financial inclusion for everyone has been a focus of every Government that has ruled India. In simple terms, financial inclusion means the availability of affordable financial products and services that meet every individual’s needs.

AMU Leasing, an NBFC, enables just that by helping individuals and fleets get financial support for electric three-wheelers and two-wheelers. As per the company, most of these individuals do not qualify for securing loans from established banks.

“There are approximately six to ten crore people who do not have access to finance, and thus they do not qualify for getting loans from established banks. We are trying to reach them,” explained Nehal Gupta, Director of AMU Leasing.

Use Of AI & ML

The company is deploying Artificial Intelligence, Machine Learning, and more such tech to assess risk mitigation for approving loans for electric vehicles. This set of tech, the company informed, is sourced from a third party.

It uses two tech platforms to assess loan approvals and deployments. The first one is used to assess the KYC documents submitted by people looking to secure loans, and this platform is trained to pick up all the relevant information along with the individual’s expenditure behaviour.

The second platform is entirely focused on risk mitigation, and it uses a rule engine to analyse data and the claims made by those interested in securing loans. It also evaluates the amount individuals are looking to raise via loans and how much they will be able to repay ‘comfortably’. AMU Leasing claims that this second platform can generate results within 30 milliseconds!

Both these platforms can be customised as per the rules and algorithms fed by the company. These rules and algorithms, Nehal explains, are changed as the size of the data with the company increases. If an individual fails to be eligible for a loan, he or she is requested to present the case again with a co-applicant’s KYC documents.

“Moreover, customers in Tier 2,3,4 regions are not intentional defaulters. These e-vehicles are bread and butter for them. It is about how well you understand their pain points, and what you can do for them,” she said.

The data generated is also used by AI to analyse demographic and repayment behaviour helping the company in fastening the overall approval processes. Further, the company has collaborated with UPI banks like Paytm and merchant banks like Airtel to enable collections of payments. 

Lower NPA

The company’s success can be gauged from the fact that it has financed over 1,500 EVs so far while maintaining a non-performing asset (NPA) rate of 0.3%. Nehal credited the good relations with OEMs, dealers, its employees, and loan-takers as the reason behind the same. However, the company is marching ahead with caution as this NPA rate might increase as their order book size increases with time. The company has financed over 900 EVs during the last nine months.

“We are hopeful of closing this fiscal with 40 crore revenue from the EV finance segment,” said Nehal. The company is currently operating in Haryana, Uttar Pradesh, and Delhi NCR for self employment loans, and large metro cities in South West for last mile deliveries. It is of the view that these three regions will continue to lead the EV markets in terms of three-wheeler registrations.

AMU Leasing finances EVs for individuals, & fleet owners, with the entry point and processes varying for these parties. Loans approved generally have a tenure ranging from 12 to 48 months, and the company’s order book is split 50:50 with retail finance & fleet finance orders. The average ticket price of a loan disbursed to an individual is INR 100,000 to INR 140,000, whereas the same for a fleet owner is upwards of INR 340,000.

OEMs collaborating with AMU Leasing include Altigreen, Euler Motors,  3EV, Greyvol, among others. “Talks for debt fundraising are going on with two Indian banks. We will announce the same before the end of this month,” she concluded.

Also Read

How RevFin Achieved 1.5% NPA In EV Finance 

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