Cars24, an online marketplace for used vehicles, has received the licence of a non-banking financial company (NBFC) from the Reserve Bank of India, and is venturing into the consumer lending business. It has also announced the formation of a separate entity — Cars24 Financial Services — under the Cars24 group to provide instant access to credit. The used-car dealer will be launching its services in Delhi, Mumbai and Bengaluru in August 2019 and will scale up to the other cities gradually.
Credit facilities will be provided to customers as well as finance channel partners to help them expand their businesses. While the customers will be eligible for a credit based on the car value they are buying, channel partners will be eligible to a credit as high as Rs 1 crore depending upon their requirement. For consumers, the average ticket size of a loan would be Rs 2.5 lakh to Rs 3 lakh.
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Vikram Chopra, co-founder and CEO of Cars24, said, “With less than 15% penetration of financing in the used cars segment, we feel that there is a massive market opportunity that can be tapped under the financing sector.” The company is targeting loan disbursement worth $25 million (Rs 170 crore) 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 — a first-of-its-kind feature in the Indian used car financing market.