Credit and Finance for MSMEs: On the back of increased participation from the corporate sector, Trade Receivables Discounting System (TReDS) platform Invoicemart has said 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 company A. TReDS told Financial Express Online. This took the total financing of MSME invoices done 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 increase to more than 11,000 by its three stakeholders: buyers (corporates/PSUs), MSME sellers, and financiers (banks). Of these, the highest percentage increase was by MSME vendors, at 10,000 sellers spread across 570 cities in the country.

So, what has changed? “The biggest shift is in the acceptability of the platform by corporates and PSU alike,” said 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 online platform that enables discounting of invoices of the MSME sellers raised on large buyers, through a transparent bidding mechanism by financiers. The government has been promoting TReDS as a solution to solve the liquidity crunch faced by MSME vendors due to payment delays by their corporate and government buyers.

Till date, three TReDS platforms including Receivables Exchange of India (RXIL) and Mynd Solution’s M1xchange along with Invoicemart have been licensed by RBI to operate.

The government’s recent approval to the Factoring Regulation (Amendment) Bill, 2021, which is likely to allow approximately 9,000 non-banking financial companies (NBFCs) to register as Financiers on TReDS, is expected to further boost participation on TReDS.