TIL Desk Lucknow/ Large number of MSMEs are benefitting from the introduction of collateral-free invoice discounting by M1xchange TReDS, India’s leading trade receivables discounting platform. The platform is designed to provide liquidity to MSME sellers against their invoices within 24 hours through online bidding mechanism from multiple financiers. This is a highly effective and efficient solution for the credit gap of MSMEs in India.
With more than 55 banks and NBFCs on the platform, MSMEs can register on M1xchange to get their invoices financed digitally without any hard collateral or security and without any recourse fee. The MSMEs get bill discounted at low interest rate as per the credit rating of the buyers.
TReDS is an innovative system conceived and regulated by Reserve Bank of India (RBI) that enables financing to Micro, Small & Medium Enterprises (MSME) at competitive rates to address the challenges of delayed payment to MSMEs. Invoices raised by MSMEs accepted by corporate buyer are funded at market determined interest rates using an auction method in which multiple financial institutions bids. This also helps businesses to pay off their dues before due date which helps them to negotiate better terms with their suppliers resulting in receiving the goods and services at much lower price.
M1xchange is supporting the growing number of MSMEs across several industries such as Manufacturing, Infrastructure, Agriculture, Steel, Power, Chemicals, Dairy, etc. These Industry sectors are also major employment providers and add to the country’s GDP significantly. Solving their Working Capital needs will allow both MSMEs and Large corporates to expand globally and prosper in business rapidly.
M1xchange has signed MoU with the Ministry of MSME for Udyam portal, MSMEs will benefit from a two-way exchange of information between Udyam portal and M1xchange. All Udyam registered MSMEs will be able to onboard on M1xchange with an easy convenient process enabling them to leverage the full force of TReDS and access liquidity at the lowest cost.
“There will be an increase in the number of non-banking finance businesses (NBFCs) joining in the current fiscal year. This could encourage platform growth in addition to the potential for IRDAI-approved trade credit insurance to take off. Additionally, he said that the industry is adopting TReDS at an exponential rate because it adds value for both large corporates and its MSME clients. TReDS as a concept has been widely adopted, which is beneficial to us. Our goal is to lower transaction costs for both suppliers and buyers while assisting MSMEs in getting their receivables discounted quickly.” said a spokesperson from M1xchange.
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