What is the secondary market and how does it work?
The secondary market is the mechanism which allows lenders to sell their Investment Orders. Lenders (assigners) can sell (assign) the balance amount in Investment Order on the secondary market to others lenders (assignees) when they buy it.
The Monexo Secondary Marketplace cannot provide a guarantee that Investment order will be sold as it depends on availability of the buyer. However, under ordinary market conditions, the secondary market typically sells Investment Order within a few days. The proceeds from the sale of Investment Order are credited to seller escrow account.
How are late payments or defaults handled during a secondary sale?
Currently, Investment Orders with late payments or defaults cannot be listed on marketplace. In the existing beta version of secondary marketplace, only current Investment Orders can be listed. We will be opening up overdue Investment Orders listing very soon.
How is a sale or purchase processed on the secondary market?
Lenders who would like to sell (assign) one or several investments can enter their request in "Loans to Sell" section. As soon as a buyer (assignee) buys it, the Investment order is transferred and the seller (assigner) receives the money in his escrow account while money is deducted from buyer’s escrow account.
How much does the Monexo secondary market cost?
The Monexo Secondary Market is offered free of charge to all buyers (assignees). Monexo charges a commission of 1% plus GST to the seller (assigner).
Who determines the price on the secondary market?
Sellers (assigners) are free to enter a selling price which can be either at par, premium or discount of the principal outstanding and interest due.
A sale is only completed once a buyer (assignee) purchases the investment order at the selling price. Buyer (assignee) cannot request for a change in the selling price.
Who can participate in the Monexo secondary market?
To participate as a seller, your minimum portfolio value has to INR 5 lacs.
Buyers can be any active lenders of Monexo. Any person registered at Monexo as a lender and have deposited at least 1L rupees in the escrow account can buy loans in Secondary market.
Individuals registered as borrower with Monexo cannot participate in Monexo Secondary Marketplace.
Do I pay taxes on my earnings on Investment Orders bought and/or sold on the Monexo Secondary Market?
Interest and other payments received in your Monexo account are generally taxable. Monexo does not provide tax, financial, or legal advice and this information is not intended to be tax, financial, or legal advice. Monexo recommends that you consult your financial or tax advisor if you have any questions.
Can I cancel a buy/sell?
No, neither the buyer (assignee) nor the seller (assigner) can cancel a secondary market transaction.
The listing to sell gets cancelled in 2 scenarios - either if the listing duration of 72 hours is complete or if during the listing the loan status has changed from current to overdue.
Why did a listing cancel?
A listing can be cancelled, if during the listing - borrower fully paid off the loan
Who receives accrued interest?
Accrued interest is the interest that has accumulated on a Investment Order during the payment cycle, but that has not yet been collected from the borrower of the corresponding loan. When the monthly payment from the Borrower is disbursed to lenders, accrued interest is paid to the holder of the Investment Order. The person who holds the Investment Order at the time the payment is disbursed by Monexo, will receive their portion of the proceeds of that payment.
What is the procedure of Buying/selling in the Secondary Market?
Lender can select multiple loans, post selection and clicking on continue all loans will be moved to second page where he can enter the selling price. He can sell the same at Par, Premium and discount. He will have to enter selling price of each loan individually. Investment Order is listed in the secondary market.
Buyers can login and view the Investment Orders listed. Buyer presses Buy Now, accepts the T&C, get an OTP for successful purchase of Investment Order
Once a sale happens, the seller’s Investment Order is updated to Sold, Buyer gets a new Investment Order and an assignment pdf gets generated highlighting the transaction details.
What are the risks of the Monexo Secondary Market?
To understand the risks of the Monexo Secondary Market, you should first understand the risks of investing in Investment Orders. This includes the risk that you may lose all or most of the principal invested.
Buying or selling Investment Orders on the Monexo Secondary Market carries risks that are in addition to those described in the lender agreement:
How do I know when a transaction is complete?
You will receive an email notification