CEO Insights Magazine

The Labor markets in India have its own sophisticated challenges to deal with. In the case of Haridas Uddhav, an electrician who does well for himself with ample work-demand in the outskirts of Pune, he had to walk or board a bus from one house (work-site) to the other. It cost him time, which constantly reflected in his monthly earnings and made him think of buying a second-hand bike that he could afford. But he knew, to avail a loan in this country, the payslip or bank statement has to advocate the case and with daily wages, he hardly stood a chance. That is when he heard about WheelsEMI, an NBFC providing pre-owned two-wheeler loans to the bottom of the pyramid, & Haridas approached them almost immediately.

Since WheelsEMI gives pre-owned two-wheeler loans to customers based on direct interactionswith them and by pragmatically understanding their cash flow, Haridas got the loan post-haste, bought a pre-owned bike in the week followed, and additionally serviced 12 houses in that month. Akin has been the story of most of the WheelsEMI customers. Thanks to the 100+ years of cumulative industry experience of its veteran founders, the company has great insights into not only the entire two-wheeler OE & retail finance business in the country, but also the purchasing patterns of the two-wheeler customers across the socioeconomic spectrum.

The four co-founders – Srinivas Kantheti, Karunakaran Vadakkepat, Phaneendra Kumar Chinta, & Ratheesh K. Bharathan– share extensive experience (30+ years

individually) between them in the two-wheeler business with leading two-wheeler OEs & NBFCs. All of them over the decades have been incidentally heading different functional departments in Bajaj Auto and Bajaj Finance. They know the way this industry breathes, and it has been the major rationale behind WheelsEMI’s success in this niche segment. To unfold more of its story, CEO Insights indulges in an interaction with Karunakaran (Joint Managing Director).

"We are able to provide customers with loan based on our discussion with them and understanding their cash flows"

What made you choose such a niche segment like pre-owned two-wheeler finance, especially considering the level of uncertainty that brings along in terms of documentation and credit scores?
When you work in an industry for three decades, you intrinsically comprehend its coordinates. The idea in truth came in one of the casual discussions between me and Srini(Managing Director). We were thinking about using our extensive experience into something that is more exciting, made good business sense and simultaneously helps the unbanked people like daily wage earners and shopkeepers as well. The Eureka moment was when Srini’s driver once missed his bus and Srini had to take a taxi to attend an important conference.

We employed a research company, and in turn became more convinced about the demand for used two wheelers. While the new two-wheeler space had seen some setback, thanks to demonetization as well as the transition from BS III to BS IV emission norms, as expected, the used segment has proven to be immune to the same, both in the offline and online segments. On the other hand, other than some local financiers with huge interest rates, the pre-owned two-wheeler buyers are left with no alternate option, which calls for an organized NBFC like us.

The entry barriers are huge in the segment, starting right from low ticket rates to high operational cost, high collection challenges, and need for documentation. How do you confront those challenges?
That’s true. Most of the people who apply for a loan with us have neither

an income document nor banking habit. The valuation of the asset,limitations on down payment and constantly migrating employees add on to the challenge matrix. That’s exactly where our years of experience and know how in taking credit decisions come handy. We are able to provide customers with loan based on our discussion with them and understanding their cash flows. KYC norms are strictly followed as well. Additionally, we help them in ownership transfer and also facilitate easy repayment through our tie-ups with companies like Vodafone.

Your company has completed two rounds of funding. How has been the experience?
Elevar Equity(Series A & B) and Faering Capital (Series B), our investors have played a positive instrumental role in this journey. As we know, Elevar Equity is known for their investment in firms that can make a difference in the livelihood of people who are at the lowest strata of society.

What are the future plans of WheelsEMI and how are you going to escalate the business from here?
Personal interaction with customers and vehicle evaluation through service engineers are big hurdles for scaling the business up. Hence our innovations are projected towards automating these two humanoid-activities. In addition, most of the OEMs are now starting their own pre-owned two-wheeler outlets, and we are already in talks with many of them. We want to close the next year with presence in 30 locations and a book size of Rs.400 crore. Our aspiration is to become one of the top two-wheeler financing companies in the next three to five years by growing our business as a hybrid model.

Key Management:
Srinivas Kantheti, Co- Founder & Managing Director
Srinivas has over 30 years of overall financing experience out of which 15 years are in the two-wheeler industry.

Karunakaran Vadakkepat, Co- Founder & Joint Managing Director
Karuna karan(Karuna) is a Sr. Executive with 34 years of Senior Management experience.

Headquarter:Pune
Offerings:Financing for pre-owned two wheelers