National portal for credit needs of MSMEs on anvil
Govt will launch MSME portal that enables cash flow-based lending using the public digital infrastructure like account aggregators, GSTIN, UIDAI and credit bureaus
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New Delhi: The central government intends to launch a national portal to enable micro, small and medium enterprises (MSMEs) to take benefit of the credit-linked schemes. This will not just help them get better access to finances, but also address the issue of delayed payments.
Emerging digital enablers and fintech companies can help facilitate credit to un-served and underserved needs of MSMEs in all segments, officials told Bizz Buzz. Cash flow-based lending using the public digital infrastructure like account aggregators, GSTIN, UIDAI, and credit bureaus is expected to be a big enabler for MSMEs, they said.
Policy changes have already been made in the Trade Receivables Discounting System (TReDS), which are expected to catalyse operations on all the TReDS platforms and help in increasing volumes on these platforms. TReDS is an electronic platform for facilitating the financing and discounting of trade receivables of MSMEs through multiple financiers, according to an explainer by the Reserve Bank of India (RBI). These receivables can be due from big corporations and other buyers, including government departments and public-sector undertakings (PSUs).
It may be mentioned here that delayed payments, both from government and private entities, have been a big problem for MSMEs for quite some time. The TReDS platform helps MSMEs sell their receivables in the market at a discounted price. While they have to suffer the discount, they are able to get their money back much faster.
At present, the TReDS platform is doing bill discounting to MSMEs. It is mandatory for all PSUs and the companies with turnover of more than Rs500 crore to join this platform. In this system, the seller and the buyer fill invoice data on TReDs portal. Only MSMEs can participate as sellers in TReDS and avail the bill discounting facility. There is also a demand from MSMEs that TReDS should be mandatorily implemented.
The proposed national portal will further help MSMEs in accessing credit and faster payments.
