Jaipur based NBFC-Factor 121 Finance plans to have co-lending agreements with banks to finance MSMEs

Jaipur, April 14 (KNN) Jaipur-based 121 Finance, an NBFC-Factor is planning to enter into co-lending agreements with banking institutes for financing MSMEs.

It recently received the Reserve Bank of India’s Certificate of Registration (CoR) under the Registration of Factors (Reserve Bank) Regulations, 2022.

Expressing his thoughts functioning as an NBFC-Factor, Ravi Modani, Founder & CEO, 121 Finance said “We will be raising funds via the non-convertible debentures (NCD) route…Digital Factoring is the simplest, fastest, effectively lowest cost solution for working capital for any business, more so for micro, small and medium enterprises (MSMEs)."

An NBFC-Factor has to ensure financial assets in the factoring business constitute at least 50 per cent of its total assets and its income derived fr0m factoring business is not less than 50 per cent of its gross income. It has to maintain a minimum Net Owned Fund (NOF) of Rs 5 crore.

It is also planning to go live on the three Trade Receivables Discounting System (TReDS) -- Receivables Exchange of India Ltd (formed by NSE Strategic Investment Corporation Ltd and Small Industries Development Bank of India), Mynd Solutions Pvt Ltd and A. TREDS Ltd (joint venture of Axis Bank and Mjunction Services Ltd) -- as a lender.

TReDS is an electronic platform for facilitating the financing / discounting of trade receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple financiers. These receivables can be due fr0m corporates and other buyers, including Government Departments and Public Sector Undertakings (PSUs). (KNN Bureau)