Best Invoice Discounting Platform in India for Retail Investors or Financial Institutions
What is Invoice Discounting Platform?
In this article, we will talk about the Best Invoice Discounting Platform in India. Before getting into the topic will reiterate the concept of invoice discounting and its platforms.
It’s a form of invoice financing where a business can sell unpaid invoices for a percentage of its value. Before extending the credit, the lender will assess the level of risk based on varied factors but largely depend on the creditworthiness of the companies with outstanding invoices. Basis the assessment, the finance provider offers terms that will state the disbursement amount with the fee for providing discounting service.
There are many players in the market which offer invoice discounting facilities and provide a platform to the business owners to sell and retail investors to buy invoices raised on blue-chip companies. Hence, it’s a great opportunity for businesses to advance working capital on their unpaid invoices raised against blue chip/creditworthy companies at a fee. Therefore, this fee will be the rate of interest at which retail investors like us can purchase their outstanding invoices and can reap quick profits.
To facilitate discounting services now the digital platforms are there to get your outstanding invoices enchased. Such type of platform is termed an invoice discounting platform.
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Best Invoice Discounting Platform in India
Now lets’s talk about the top 5 player that offers invoice discounting platform in India:
TradeRed
It is a digital platform that deals in invoice discounting and is topping the chart as the best platform in India. Tradecred is synonymous with Trade Credit. Certainly, it is an extremely credit-worthy solution that offers a marketplace for buyers and sellers. In return let you earn yields up to 14% in fairly flexible tenure in exchange for the invoice amount. On this platform, sellers are businesses looking for money against their unpaid invoices. Sellers could be individuals (retail investors), HUFs, HNIs, Banks, NBFC.
As an investor, you can register yourself on the platform by the simple sign-up process. Activate your wallet by transferring the amount from your bank account. Followed by going on the dashboard, you can view different invoices uploaded by the vendors of the blue-chip companies. Above all, these are verified by Tradecred for the acceptance at customer’s end. Moreover, the yield, maturity, due date, maturity amount, minimum amount, etc about an invoice would be available on the dashboard. As per your risk appetite, you can park your money and earn a minimum interest of 1% pm.
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Kredx
KredX offers a completely paperless way of investing in a unique opportunity to make low-risk and high-return investments within a short span of 30-90 days. Moreover, this avenue also helps in diversifying your financial portfolio as the unpaid invoices belong to varied sectors. Thus, you can spread your risk among different industries.
This platform guarantee market returns of min 12-20% pa. To clarify no other instruments available in the market can secure the same returns. As you get a chance to invest in already accepted invoices at the customer end hence minimizes your risk exposure. In addition, there is a risk mitigation team that does a detailed credit and financial analysis of sellers to onboard on KredX. To ensure they are dealing with credit-worthy buyers. What else do you need a quick return within 30-90 days which at current no financial instrument can offer you. However, it is also open for retail investors apart from the rest categories.
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Invoicemart
Invoicemart is an electronic Trade Receivables Discounting System (TReDS) platform set up to resolve working capital challenges faced by MSMEs. It’s a joint venture between Axis Bank and mjunction services. Started operations in July 2017 which allows transparent online selling of receivables by MSMEs through discounting. However, on invoicemart the participants acceptable are Banks, NBFC, HUFs, Sole Propertierships, Public or Private limited companies, Trust but not retail investors. Moreover, this platform is reserved for MSMEs only.
RXIL
RXIL is a joint venture between SIDBI and NSE to promote the financing of MSMEs in India. It operates the TReDs platform as per the guidelines outlined by RBI to ensure sustainable development and growth of the MSME sector. This is the first organization set up under the approval of RBI to operate the TReDs platform on the same line of working for other platforms. But this platform is also limited to Banks, NBFCs, corporates, private limited companies, and as permitted by RBI.
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M1xchange
M1xchange is one of the oldest trade receivable platforms. Acts a boon to suppliers in times of cash crunch especially for MSME suppliers. RBI has envisaged Trends as a digital platform across India to finance trade receivables of MSMEs from corporate buyers via multiple lenders. Once a supplier uploads an invoice and goes through a level of approval at the buyer’s end. Once it gets approved and verified at M1xhange, the financier can bid against the invoice. Following which the supplier has got complete freedom to accept the best bid and receives the payment in T+1 days.
The Bottom Line
These are considered as one of the top 5 digital platforms for invoice discounting from suppliers’ aspect. However, retail investors can make use of only the above two platforms to reap quick profits in case someone looking to invest in secured low-risk avenues.
Hope we meet up to your expectations and bring you something new this time!