Credit and Finance for MSMEs: On the back of improved participation from the corporate sector, Trade Receivables Discounting System (TReDS) platform Invoicemart has stated it processed the highest volume of invoices worth Rs 1,000 crore on its marketplace so far in August 2021. “It looks like we’ll do an encore in September as well,” Prakash Sankaran, MD & CEO of Invoicemart parent business A. TReDS told TheSpuzz Online. This took the total financing of MSME invoices performed by banks on Invoicemart to Rs 16,000 crore.
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The Reserve Bank of India (RBI) regulated marketplace also saw the registrations raise to more than 11,000 by its 3 stakeholders: purchasers (corporates/PSUs), MSME sellers, and financiers (banks). Of these, the highest percentage raise was by MSME vendors, at 10,000 sellers spread across 570 cities in the nation.
So, what has changed? “The biggest shift is in the acceptability of the platform by corporates and PSU alike,” stated Sankaran.
He added, “The platform throughput has grown by 300 per cent in the first quarter of this year when compared to the corresponding quarter of the previous year. Also, government business on Invoicemart has doubled in the last year and a half, and government entities have started showing a lot of interest in increasing volumes on the platform. This tells us that small business owners are able to get funds from TReDS and that to me is the most material metric.”
TReDS is an on-line platform that enables discounting of invoices of the MSME sellers raised on huge purchasers, by way of a transparent bidding mechanism by financiers. The government has been advertising TReDS as a option to resolve the liquidity crunch faced by MSME vendors due to payment delays by their corporate and government purchasers.
Till date, 3 TReDS platforms such as Receivables Exchange of India (RXIL) and Mynd Solution’s M1xchange along with Invoicemart have been licensed by RBI to operate.
The government’s current approval to the Factoring Regulation (Amendment) Bill, 2021, which is probably to permit roughly 9,000 non-banking monetary providers (NBFCs) to register as Financiers on TReDS, is anticipated to additional increase participation on TReDS.