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E-marketplace for money

market Instruments
Evaluating the opportunity

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What we wish to do ?
Design and develop an eMarketplace for Money market
instruments where Borrowers and
Investors meet and finalize the yield/
interest rate through transparent and
efficient platform.
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What is a Money Market ?


TheMoney market in India is for short-term and
long-term funds with maturity ranging from
overnight to one year involvingfinancial
instrumentsthat are deemed to be close
substitutes ofmoney.
Money Market Instruments :

Call/Notice/Term money market


Repurchase Agreement (Repo & Reverse Repo) market
Treasury bill market
Commercial Bill market
Commercial paper market
Certificate of Deposit market
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Money Market Mutual Fund

Challenges in Money Market


A major challenge in Indian Money Market is the
existence of dichotomy i.e. existence of two
markets: -Organised Money Market and Unorganised
Money Market.
Variation in Interest Rates: - There are different
rates of interest existing in different segments of
money market.
Shortage of Funds: - In Indian Money Market,
demand for funds exceeds the supply.
Inefficient And Corrupt Management: - One of
the major problems of Indian Money Market is its
inefficiency and corrupt management.
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Our Analysis
Today, there are platforms (eg FIMMDA) available
to capture post transaction data but no such
platform available to capture pre-transaction
information, and facilitate the discovery of the
yield/interest rate.
There is no single location or exchange where
money market participants interact for common
business. Participants talk to each other, over
telephone, concludes deals by Fax, Mail etc.

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Proposed Business Model


We propose to design an e-marketplace for Indian
money market.
Phase I Trade Lead service
( e-classified model)

1) Borrower upload the request of


fund along with the time period
2) MJ promote the enquiry among
Mutual Fund companies & Investors
3) Investors respond to Borrowers
enquiry ( communicate interest)
4) Borrower discuss rate of yield /
interest with the Investors offline.

Benefit: Borrowers reach increases,


Investors get new business
opportunity.

Phase II Price discovery model


(e-marketplace model)

1) Borrower request for fund and


ask investors to quote price in a
standard format
2) Investors submit quote through
MJ auction platform
3) Borrower finalizes deal based on
the quote received.

Benefit: Market based rate


discovery model

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Business Model Canvas


Opportunity

Key Activities

Value Proposition

Customer
Relationship

Customer
segmentation

Indian Money
market size would
be around Rs 10
Lakh Crore. In FY
14, Commercial
papers worth Rs 3.5
Lakh Crore were
traded.
Key Partners

1.

1.

2.
3.

Credit Rating
Agencies.

4.
5.

Design, Develop and


establish an emarketplace for money
market instruments
where Borrower and
Investor can meet and
trade among
themselves.
Promotion of emarketplace
Acquiring Clients
( Borrowers &
Investors)
Manage rate / yield
discovery.
Provide Support

2.

3.

4.

5.

Repository of
Instruments hosted
by market
participants.
Connect Interested
Borrowers &
Investors.
Determine interest /
yield rate based on
market competition.
Optimize revenue
maximization and
cost
Inject Transparency in
the System.

Self Service
Direct access
to the trade
partners
through emarketplace

Channels
1.
2.

Financejunctio
n website
E-mailers

Cost Structure

Revenue Streams

1.

Based on Per Trade lead


Membership plans
Service charges on the Transaction value

2.

Website development & management cost:


The ready module as available for Imported
Coal may be used.
Resource Cost: Internal Resource engaged for
3 months pilot.

Niche Market
Closed group
Open only to
credible market
participants.
Organized
Sector consists
of RBI,
Commercial
Banks, and
Financial
Institutions etc.
Unorganized
Sector consists
of IBs, MLs, Chit
Funds, Nidhis
etc.

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Challenges in
Implementation
The treasury managers will resist implementation
of such initiative
Convince the Borrower that the quote received is
as per market rate / or better than the market.
Convince Borrowers and Investors to come
aboard.

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New Business Evaluation Matrix


Customer Filter

Unmet need or desire existent


Yes
Segment able market
Yes
Reliable access to customers
Yes
Loyal & recurring customer base
Yes

Product / Service Offering Filter

Timing Filter

Inefficiency in the market


Yes
Recent (tech/regulatory) enabler
No
Market in growth stage
Yes
Commoditization existent
No

Competition Filter

Limited no. of competitors


NA
Highly competent competitors
NA
Low barriers to entry
Yes
Differentiation possible
Yes

Financials Filter

Clear value proposition


Yes
Low barriers to adoption
No
Strong competitor networks
NA
Word of mouth potential
Yes

Low setup / sunk cost


Yes
Healthy Margins
Yes

People Filter

Subject matter expertise


No
Functional capability
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Yes

Your Views Please !

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