Invoicemart makes new business case for banks

The recent addition takes the total number of financiers on the platform to 10, and the number of buyers to 27, and MSME sellers to 300. Invoicemart has witnessed a rising interest in financiers warming up to the idea of online invoice discounting. The banks are also gearing up their internal processes by setting up specialised departments and branches.

Invoicemart, a TReDS (Trade Receivable Discounting System) platform is a digital invoice discounting marketplace by A TREDS Ltd, a joint venture between Axis Bank Ltd and B2B e-commerce company mjunction services Ltd. The platform connects MSME suppliers (sellers) and their corporate buyers to multiple financiers. It enables discounting of invoices of the MSME sellers raised on large buyers, through a transparent bidding mechanism that ensures financing of receivables at competitive market rates. 

Through the platform, MSME suppliers can avail finance quickly and at competitive interest rates which in turn helps increase their working capital efficiency without impacting their relationship with buyers. 

According to BCG-FICCI 2017 report, less than 10% of the 50 million strong MSMEs borrow from formal financial institutions.

If targeted and serviced appropriately, MSMEs can grow to have substantial share of Indian bank’s commercial balance sheets in the next 3-4 years. 

Kalyan Basu, CEO & MD, Invoicemart said, “Team Invoicemart understands the challenges faced by MSMEs in obtaining working capital finance and the systemic gaps in the financial ecosystem. Our endeavour is to bridge the gap that has prevented institutional lenders from reaching out to small businesses.” 

Factoring platforms such as Invoicemart offer financiers to extend loans to MSMEs based on the ratings of their corporate buyers which usually have good borrowing ratings. This allows MSMEs to get capital at lower costs while financiers are not only assured of repayment but also get PSL accreditation for such loans.