Investors Find Other Kingfishes Than Real Estate And Gold Post Demonetization

Research says that the current time holds nothing good for real estate, gold and stock market to be tickled pink. Post demonetization has made the market hold at bay in these following sectors of investments; in lieu of these major sectors some alternative lending startups have taken up as pawnshop and choice of financial investment. Kredex, the Sequoia-backed financial firm has pointed out a 4-5x upsurge in lender registrations on their platform after the money ban declaration which incorporates high net-worth individuals (HNIs) and institutional moneylenders like banks and other non-banking financial companies (NBFCs) in invoice discounting market place. Government’s push for cashless economy somehow is indirectly promoting virtual loan sharks.

Now financial technology is one of the established profitable sectors of Sequoia Capital of India. Asking on the same chief executive of Kredex Manish Kumar said, “Invoice discounting is becoming an alternative to the three asset classes which are real estate, bullion and stock market because it provides higher liquidity and a decent yield on their investment.” Initially in October 2016 Kredex raised 40 crore from Sequoia and existing backers. The Bengaluru based startup is known for its technically operated marketplace, where it links small and medium scale enterprises (SMEs) with prior investors who show interest in purchasing these unpaid collectibles to help them with their dynamic capital loop. Kredex investors receive interest rates ranging from 11-20 per cent. Banks and other financial organizations are looking forward to lend via this alternative lending platforms going next to the government’s digitization transaction declaration.

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“We are noticing strong interest from banks and NBFCs to partner with us because demonetization is pushing SMEs to go digital, which makes them more lendable by online lenders like us who thrive on data,” said Sashank Rishyasringa, cofounder of online lending platform Capital Float, whose corporate partners have been devoted themselves to increase their lending capacity since the demonetization came in front.
Where the entire nation is having the quiver of cash crunch P2P lending companies such as Faircent, i-lend and (ATL) have witnessed roughly 3x growth in lender registrations where as the major investment sectors are battling to get back into the scene. While there is strong interest from individual lenders, Hyderabad based ATL is also in process of tying up with three NBFCs to turn into a P2P platform lending business. “NBFCs come with bigger ticket – Rs 2-5 crore, which sizes of around will make it easier for us to meet the demand of borrowers,“ said Keerthi Kumar Jain, chief executive of ATL.

“Earlier, a lot of money was parked in real estate,” said Vinay Mathews, founder, Faircent.”Suddenly, our business model makes sense for investors like salaried professionals, small business owners, moneylenders, HNIs and institutional lenders.”
Small business houses are finding this invoice discounting marketplace an attractive platform to park their money in. It has higher interest level and better stability which certainly have been emerging this sector as a secure investment zone for future.

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