Eqaro Guarantees, a pioneer in the field of credit default guarantees has tied up with Terra Motors and digital lender Pest Loans.
Under the three-way arrangement, Eqaro Guarantees will be extending credit default guarantees on the loans extended by Prest Loans for the purchase of electric vehicles sold by Terra Motors. The presence of the guarantor improves lender confidence which benefits the borrower by way of lower interest rates, longer tenures due and lower EMIs.
Under an existing agreement with Prest Loans, Eqaro Guarantees extends credit default guarantees for loans extended to small businesses and MSMEs. This new initiative, aimed at borrowers of both passenger and load-carrying electric vehicles including E-rickshaws, E-carts, loaders, delivery vehicles, etc will help broaden the scope of offerings.
The arrangement is directed towards providing credit default guarantees to individuals & corporates hire purchase as well as leasing. Under the lease rental guarantees to corporate entities, the lessor will be protected against the default in the payment of the lease by the lessee.
Overall, the guarantees help make credit accessible to a segment that has been severely impacted due to the pandemic in terms of job losses. As per the recent CMIE report, there were over 15 million job losses during the month of May 2021. Urban joblessness has hit 18% during the week ended May 30. A total of over 25 million losing their jobs since January this year. The electric vehicle industry has the potential to support the livelihoods of the poor.
Vikash Khandelwal, CEO, Eqaro Guarantees said, “We are delighted to partner with Prest Loans and Terra Motors for financial default guarantees that can help institutional as well as individual borrowers’ get easier access to credit for the purchase of electric vehicles. Financial Default Guarantees helps borrowers improve their creditworthiness and obtain better terms for its borrowing program from a wider set of lenders. India’s E-auto market is a huge opportunity. Our guarantees will support the government’s thrust on green mobility & help hasten the adoption of electric vehicles.”
Ashok Mittal, CEO, Prest Loans said, “E-vehicles is a new segment to finance in India. It does not enjoy high levels of lender confidence as there is no evolved pre-owned vehicle market or predictable prices for second-hand E-vehicles. Having a credit default guarantee helps reduce risk and boost lenders’ confidence. Our core philosophy to support self-employment and create an impact in the society will further strengthen with this guarantee arrangement”
Ahikiro Ueda, CEO, Terra Motors said, “The partnership between Terra Motors’ affordable, high-quality EVs and Eqaro’s credit default guarantees will expand opportunities and incentives for all segments of the Indian potential user to purchase EVs. It will be a big step toward creating a safer and much better lifestyle.”