TReDS to improve flow of Working Capital Credit to MSME biz
The MSME industry is the backbone of the economy, with 40% of national employment, accounting for 30% of the country's GDP, 48% of total exports, and 40% of total workforce employment. Despite these realities, the growth of such MSMEs can be a real bottleneck of a five trillion economy.
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Mumbai, June 21: The MSME industry is the backbone of the economy, with 40% of national employment, accounting for 30% of the country's GDP, 48% of total exports, and 40% of total workforce employment. Despite these realities, the growth of such MSMEs can be a real bottleneck of a five trillion economy.
For business expansion loan against collateral is time-consuming for MSMEs and is the biggest barrier due to credit history, documentation, etc. However, transactions on TReDS platform happen digitally and start when the MSME Supplier of Goods & Services raises the invoice and the Buyer validates the same. This permits the financiers (Banks/ NBFCs) to bid against the verified and approved invoice. Once the supplier accepts the bid, the payment is processed in 24 hrs and credited to the MSMEs bank account. Through this platform, MSMEs have greater access to finance" at competitive rates and without providing any collateral.
Since 2017 only three entities are providing trade receivable services to MSMEs and M1xchange is one of the leading platforms providing the same to around 18000 MSMEs from 1600 locations. M1xchange's leading-edge technology is transforming supply chain financing across the country where MSMEs can register on the respective platform to get their invoices financed digitally without any collateral or security and without any recourse, allowing small businesses in India to optimize their working capital, unlock liquidity, and build seamless financial ecosystems. This will provide an opportunity to enhance MSMEs’ productivity, competitiveness, and long-term growth.
