News Stardom : Kolkata, 22nd.December 22 : India’s leading TReDS Platform M1xchange plans to strengthen nearly 50 lakh MSMEs of West Bengal through Trade Receivable Discounting System (TReDS). The platform intends to offer early liquidity within 24 hours through its online bidding platform to Micro, Small and Medium Enterprises at a competitive rate in the state and offers a digital customer experience to MSMEs supported by a convenient and end-to-end digital process. This is a highly effective and efficient solution for the credit gap for MSMEs in India.
The RBI-approved TReDS platform M1xchange has signed MOU with multiple state governments. The support from the Govt. helps MSMEs operating in these regions to get easy access to working capital through M1xchange TReDS.
M1xchange has also 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 possible cost in the country.
M1xchange has on boarded 50 banks and NBFCs. MSMEs can register on M1xchange to get their invoices financed without any hard collateral or security and without any recourse fee. Till date M1xchange has facilitated bill discounting of more than INR 38,000 crores to more than 15,000 MSME suppliers spread across 1,400 towns from across the country including West Bengal.
“The cost of funding outside the banking system is very high for MSMEs. With this unique proposition developed by M1xchange TReDS, MSME enterprises will be able to utilise TReDS for receivables discounting from their corporate Buyers at market-determined interest rates using an auction method in which multiple financial institutions bid. Corporate buyers in turn will be able to procure at better prices and manage their inventory adequately,” said a spokesperson from M1xchange.
M1xchange has also started testing of ‘Small-Small Factoring’ product under the Reserve Bank of India’s (RBI’s) third cohort of the regulatory sandbox. The product aims at facilitating ‘early liquidity’ for MSME buyers and sellers. Once fully rolled out, the product is likely to help address over $750-billion credit gap for MSMEs in India.
About M1xchange: M1xchange is a TReDS (Trade Receivables Discounting) exchange that started in April 2017. M1xchange facilitates the financing of trade receivables of MSMEs from corporate buyers through ‘factoring’ or ‘invoice discounting’ by financiers (Banks and NBFC). In a short span of time, M1xchange has onboarded 50 Banks, 1,300+ corporates, and 14,000 + MSMEs and has facilitated discounting of invoices more than Rs 38,000 Crores. Transactions on the 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, M1xchange promises MSMEs greater access to finance” at competitive rates and without providing any collateral. Further, the financing is without recourse. MSMEs pass on the risk of receivables to the financiers (NBFCs/Banks) by selling their receivables.
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