Invoice discounting on Trade Receivables Discounting System (TReDS) platform by M1xchange has crossed Rs 5000 crores worth transaction which nearly occupies forty percent of the cumulative transaction conducted by all three platforms, making M1xchange India’s trusted and leading TReDS platform.
Before the end of this financial year it is estimated to cross Rs 7,000 crores (1 Billion dollars) and digitally transform the process of gaining access to working capital for MSMEs via invoice discounting through multiple financiers. M1 team since its launch on April 7, 2017 has worked through many challenges to ensure successful implementation of factoring in India for the first time however few regulatory amendments can speed the pace of dispersing trade receivables of MSMEs from corporate and other buyers, including government departments and public sector undertakings (PSUs).
Non-banking financial companies (NBFCs) have played a key role in India’s march towards financial inclusion and have particularly played a great role in providing solutions to the MSME (micro small and medium enterprises) segment. A recent announcement in relaxation of norms for NBFCs to be a part of TReDS is a pertinent step towards enabling the use of TReDS. . To bring more cash liquidity on TReDS, NBFCs need to be allowed on the platform for which an amendment of the Factoring Regulation Act, 2011 is necessary and expected to be taken up in the current winter session of the Parliament.
Sundeep Mohindru, CEO of M1xchange said, “It has been our commitment to find a one-stop solution to resolve all payment related issues for MSMEs and at this juncture our long trusted relationships with MSMEs across the country must be maintained strongly and the performance and delivery of M1xchange TReDS can be seen by the total worth of Rs 4700 cr transaction facilitated in last eighteen months . We are very pleased with the initiatives of the Government and RBI support for TReDS.”
The inclusion of NBFCs will also spur employment generation alongside economic value edition. It is now more than imperative for banks that the excluded units are brought within the fold of the formal banking sector. The TReDS platform provides MSMEs the critically important facility of obtaining quick easy and assured settlement of their invoices and at a competitive rate through an auction where multiple registered financiers can participate. Most importantly, it helps MSMEs boost their ability to re-invest in their businesses faster to increase turnarounds, overall scale and financial well-being.
M1xchange is an RBI approved TReDS (Trade Receivable Discounting System) platform. TReDS is an institutional mechanism set up in order to facilitate the financing of trade receivables of MSMEs from corporate buyers through multiple financiers. TReDS will boost the Indian economy by solving the erratic cash flow problems of MSMEs caused due to slow paying invoices. M1Xchange has digitally transformed the vender payment ecosystem and the way MSMEs generate working capital. This has been achieved through seamless presentation of bills, their validation, discounting, and approval of funds on a single platform. There is no need for additional collaterals to raise money through the platform.