Indian fintech firm Mufin Green bags $18m for EV loans to MSMEs
Mufin Green Finance, a non-banking financial company, has raised US$18 million in debt funding from a United States-based institution.
This funding aims to expand its electric vehicle (EV) financing and leasing operations.
The 10-year facility begins with an initial disbursement of US$10 million. The remaining $8 million will be provided within a year.
The funds will be allocated to enhance financing for electric two-, three-, and four-wheelers, as well as related infrastructure.
A significant portion of the funding will improve credit access for micro, small, and medium enterprises (MSMEs), especially in underserved regions.
Founded in 2016, Mufin Green specializes in financing EVs, charging infrastructure, and swappable batteries.
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The debt funding secured by Mufin Green Finance reflects a broader financing trend in India’s rapidly growing EV sector, which is projected to expand from $2.4 billion in 2025 to approximately $19.9 billion by 2030, representing a 53% compound annual growth rate 1.
This growth is heavily skewed toward affordable mobility solutions, with current EV sales comprising 53% two-wheelers and 42% three-wheelers, while four-wheelers account for just 5% of the market 1.
For context, while approximately 19.5 lakh (1.95 million) EVs were sold in India in 2024, electric passenger vehicles represented only about 90,000 units, highlighting the dominance of commercial and lower-cost segments 2.
Mufin’s business model targeting MSMEs in tier-2 and tier-3 cities directly addresses this market reality, where commercial vehicles like e-rickshaws represent the largest adoption opportunity but face significant financing barriers.
The company’s claim that 84% of its retail borrowers had never previously accessed formal credit highlights how specialized EV lenders are expanding financial inclusion while simultaneously driving clean mobility adoption.
Traditional lenders struggle with EV financing due to uncertain residual values, lack of standardized battery assessment protocols, and limited resale mechanisms, creating a gap that specialized NBFCs like Mufin are addressing 2.
This specialized knowledge is crucial as rapid battery technology advancement creates underwriting challenges. Lenders must evaluate not just the borrower’s creditworthiness but also the technology’s longevity and future value 1.
The Finance Industry Development Council has specifically highlighted these bottlenecks, advocating for government schemes similar to FAME (Faster Adoption and Manufacturing of Electric Vehicles) to incentivize EV financing through subsidized interest rates 3.
Mufin’s approach of offering financing across the EV ecosystem—including vehicles, charging infrastructure, and swappable batteries—demonstrates how specialized lenders are creating comprehensive solutions to address these unique sector challenges.
While Mufin has shown impressive revenue growth with a 62.41% CAGR over three years, its declining net profit (-13.51% CAGR) and falling ROE (8.30%) highlight the profitability challenges even specialized lenders face in this emerging market 4.
The recent Union Budget 2025 demonstrates the government’s growing recognition of EV ecosystem needs by exempting 35 additional capital goods from customs duty for battery manufacturing and allocating ₹4,000 crore to the PM E-DRIVE Scheme 5.
However, these initiatives primarily focus on manufacturing and adoption incentives rather than addressing the financing bottlenecks that NBFCs like Mufin are attempting to solve through private capital.
Specialized EV financing for MSMEs remains particularly critical as small businesses typically lack the capital to manage the higher upfront costs of EVs, despite the long-term operational savings they offer.
Mufin’s second debt facility this year (following an earlier $18 million loan from the US International Development Finance Corporation) demonstrates how international development finance is stepping in to fill gaps where domestic financial systems face constraints.
The pattern of international financing supporting India’s EV transition suggests that global investors recognize both the environmental and financial opportunities in this sector despite the current financing challenges.
……Read full article on Tech in Asia
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