What is Invoice Discounting?
Invoice discounting is the practice of using company's unpaid invoices to raise working capital & fulfil its financial needs. Traditionally, financial institutions including banks and NBFCs have been discounting invoices for MSMEs. Invoice discounting involves transfer of rights on an asset (invoice) from the seller (i.e. business) to the financier (i.e. investor) at an agreed value.
What is KredX?
KredX is an online invoice discounting platform where business owners get an opportunity to raise funds for their working capital needs at attractive terms by selling their unpaid invoices raised on blue chip companies. KredX aims to remove operational inefficiencies around the invoice discounting space by extensively using technology and its data analytics & credit underwriting capabilities.
How does it work?
KredX provides a marketplace/platform for business owners to sell and investors to purchase invoices raised on blue chip companies. It combines the best in class technology experience with credit underwriting & data analytics capabilities to create a brand new investment asset class.
Business-owners looking for advance on their invoices, raised on blue chip/creditworthy institutions, can use our platform to sell these unpaid invoices at attractive rates. Register yourself with us on our website as a business and we will help you sell your invoices at competitive rates.
Investors looking to invest money for short term (30-90 days on an average) can earn attractive returns on their investment by purchasing these future cash flows. Register yourself with us on our website as an investor and we will help you park your investments in this unique asset class with varying maturity periods providing attractive risk-adjusted ret
Who is behind KredX?
KredX is backed by a set of passionate founders, financial & technology experts and industry stalwarts. For details about our team, click here.
Who can invest with KredX?
Individual resident investors
HUF / Proprietorship registered in India
Institutional investors
Banks, NBFCs and other Financial Institutions
NRI investors (Provided you have an NRO account and comply with basic pre-defined KYC guidelines- Pan card and valid Indian address proof.)
Is there a minimum amount for investment?
As of now you can invest a minimum of INR 3 lacs per deal. This has been set to ensure that you have sufficient liquidity to invest in an alternative investment class and the required risk appetite for the same.
What is the eligibility criteria for businesses?
Any business that supplies goods/services to large blue-chip companies can avail the bill discounting services provided by KredX. Eligibility and amount of discounting is governed by the creditworthiness of the business and therefore they should be willing to share their financial information and other related documents.
Does KredX have an upper sanction limit?
We have no upper limit for sanctioned amounts for your invoices and it is solely dependent on the borrower’s requirements. The upper limit depends on the business requirement and the eligibility as per KredX’s criteria.
What is the maximum invoice discounting tenure?
As we provide short-term investment facility to our investors, we only offer tenures upto 90 days as of now.
Will KredX’s invoice discounting facility affect my balance sheet?
No. We offer a zero-liability bill discounting service. Since the working capital is availed using invoices, it bears no impact on your balance sheet.
What is the kind of returns expected for the investors?
KredX does not play a role in deciding the discount rates of the invoices. The returns on your investment will be governed by market forces on the basis of demand and supply economics. Expected yield corresponding to deals will be made available to investors before any purchase, this ensures that investors know their returns before initiating the fund transfer.
Does KredX guarantee my returns?
KredX provides a platform to connect sellers of invoices and investors and execute transactions between them. KredX provides certain tools, for example - credit report of the seller, enterprise report (blue-chip company) among others - to take a calculated investment decision.
KredX does not guarantee any fixed return to its investors and the investment would be subject to the traditional market risk associated with invoice discounting. Please refer to the Risk factors for details.
Will my financial information be shared with other third parties?
No, KredX is serious about data privacy and we maintain complete confidentiality of your private & financial data and we are legally bound by our privacy policy to not share the data. We request you to read our privacy policy and term of use for additional details.
What is the Risk involved?
Any investment comes with its own associated risk. The risk could be total capital erosion. However, we have taken several steps to mitigate the risk – both strategically and operationally:
Comprehensive risk management framework – Detailed credit analysis of sellers and their financials at onboarding
Verification process - Invoices are verified physically. Moreover, invoices are restricted to only blue-chip companies.
Strong legal framework – All sellers are required to sign our legal agreements to ensure our investors are well protected.
If blue-chip company does not pay the invoice money in future – the small business is still liable to pay the money owed to the investor.
If the small business collapses, the blue-chip company would still pay the invoice money and this will be paid directly into the escrow account which will be transferred to the investor.
KredX is a tech platform and it does not assume any credit risk on behalf of the investors.
What happens if KredX goes out of business?
KredX in collaboration with their partner bank has facilitated opening of an escrow account for each individual member. All transfer of funds happen through these escrow accounts. In case of liquidation of KredX due to any financial/legal reason, money in member's escrow account will be returned to the respective owners immediately. Money involved in the process will not be transferred to KredX's account at any stage (except service fees and government taxes, etc.).