Used car marketplace CARS24 forays into consumer lending business
Online marketplace for buying and selling used cars, CARS24 on Thursday announced that it has procured an NBFC License from the RBI and will be venturing into the consumer lending business.
With an aim to provide seamless and instant access to credit, the company has also announced the formation of a separate entity, CARS24 Financial Services Pvt. Ltd, under the CARS24 group.
The company will be launching services in Delhi, Mumbai and Bangalore in August 2019 and will scale up to the other cities gradually.
Through this business, CARS24 looks to facilitate vehicle loans to customers as well as finance channel partners to help them expand business. While customers will be eligible for credit based on the car value they are buying, channel partners will be eligible to credit as high as Rs 1 crore, depending upon their requirement.
The company said that for consumers, the average ticket size of a loan would be around Rs 2.5 to 3 lakh.
Vikram Chopra, Co-founder and CEO of CARS24, said,
“We are delighted with this progress and intend to set a benchmark for delightful customer experience on our platform with our new offering. As a brand, we not only promise an ecosystem for buyers and sellers where they can evaluate their vehicles but can also avail loans for a quicker transaction.”
The company is planning to hire over 200 people for its newly launched arm and is targeting loan disbursement worth $25 million within the maiden year of its launch.
It will also allow consumers to sell their cars to CARS24 at any time in future to pay back the loan.
“With our lower turnaround time for credit as compared to other banks, we believe that our consumer lending business will benefit both our customers as well as channel partners. The idea is to help those buyers who have been unable to fulfil their dream of owning a car due to lack of funds and support from traditional institutions and banks. Once the application is approved by us, one can get the money in hours instead of weeks”, said Ruchit Agarwal, Co-founder and CFO, CARS24.
In April this year, CARS24 raised funding of Rs 77.58 crore from its Singapore parent Global Car Group.
At present, the platform operates in more than 35 cities with more than 150 branches. The company intends to scale up its presence in more than 300 Indian Tier-II, III and IV markets by 2021.
(Edited by Saheli Sen Gupta)