• Market scale disparity: India's corporate bond market stands at $0.64 trillion (16% of its $3.95 trillion GDP) and total borrowing is at 72%, trailing significantly behind the US at $11.55 trillion (36%) and China at $11.15 trillion (55%).
• Retail debt distribution: To tap domestic savings beyond metropolitan centers and expand into Tier 2 and Tier 3 locations, the industry is advocating for a formal debt distribution network currently under consideration by SEBI.
• Yield and MSME financing: Direct bond market participation aims to deliver 8% to 10% returns to rural savers to beat inflation, while reducing borrowing costs for MSMEs currently paying 12% to over 20% in interest.
• Investor protection mechanisms: The development of market-making infrastructure, a credit default swap market for lower-rated papers, and an issuer-funded Fixed Income Credit Guarantee Scheme similar to DICGC were proposed to protect retail investors.