Ease of Doing Business for MSMEs: C2FO, a global on-demand working capital platform, on Tuesday announced that its India arm C2FO Factoring Solutions Private Limited has got an in-principle approval from the Reserve Bank of India to set up and operate Trade Receivable Discounting Systems (TReDS) platform in India. With this, C2FO has become the fourth platform to get the license to operate TReDS after Receivables Exchange of India Ltd (RXIL), M1Xchange and Invoicemart.
The fintech platform C2FO provides working capital to businesses and claims to be serving more than ten lakh businesses across 160 countries. Out of these, two lakh businesses are in India with a significant share of micro, small and medium enterprises (MSMEs).
The company said that it is planning to leverage its network and understanding of the 50,000 MSME suppliers and big corporations in the country as it builds the TReDS platform. Besides that, C2FO announced that it will bring newer technology solutions to India to address the working capital needs of businesses.
“C2FO’s mission is to provide working capital to every business that needs it,” said the Managing Director and COO of C2FO Basant Kaur adding that the company would unlock value for MSMEs and contribute to India’s rapid economic growth.
The institutional mechanism TReDS was launched by the central bank in July 2014 to enable discounting of MSMEs trade receivables through multiple financiers.
According to the data by the RBI, the value of transactions undertaken on all TReDS platforms in FY2022 doubled to Rs 34,362 crore from Rs 17,080 crore in FY2021, and more than tripled from Rs 11,165 crore during FY2020.
The government in August last year, had amended the Factoring Regulation Act (Amendment) 2021 to permit Non-Banking Finance Companies (NBFCs) to register on TReDS for discounting MSME invoices.