HDFC Bank gets on TReDS platform to serve MSMEs; ties up with M1xchange

Credit and Finance for MSMEs: M1xchange said it has discounted invoices of over 11,000 MSMEs amounting to more than Rs 29,000 crore so far and aims to increase its footprint in digital factoring by 25 per cent to 30 per cent in the current fiscal with the latest partnership.

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M1xchange had recently announced a partnership with private lenders YES BANK and RBL Bank as well to start testing of ‘Small-Small Factoring’ product under the Reserve Bank of India’s (RBI’s) third cohort of the regulatory sandbox. (Image: pixabay)

By Parvathy Pillai

Credit and Finance for MSMEs: Private sector lender HDFC Bank has partnered with invoice discounting platform M1xchange to get onboard the Reserve Bank of India’s Trade receivables Discounting System (TReDS) mechanism to cater to MSMEs. “This move is expected to bring in high liquidity to buyer corporates and MSMEs at competitive interest rates,” according to a company statement. M1xchange said it has discounted invoices of over 11,000 MSMEs amounting to more than Rs 29,000 crore so far and aims to increase its footprint in digital factoring by 25 per cent to 30 per cent in the current fiscal with the latest partnership.

“HDFC Bank will benefit from partnering with M1xchange with shorter TAT and lower admin costs in booking additional New-to-Bank (NTB) corporate buyer relationships,” said Sundeep Mohindru, MD & CEO, M1xchange.

“This partnership is expected to bring in more liquidity and enhance adoption of TReDS among a wider number of Corporate Customers and MSMEs,” said Vijay Mulbagal, Senior Executive Vice President, Head MNC Coverage & Supply Chain Finance, India, Head Corporate Bank (western region), HDFC Bank.

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The development comes a few days after M1xchange announced a partnership with private lenders YES BANK and RBL Bank as well to start testing of ‘Small-Small Factoring’ product under the Reserve Bank of India’s (RBI’s) third cohort of the regulatory sandbox. According to the company, the product aims at facilitating ‘early liquidity’ for MSME buyers and sellers.

Meanwhile, the value of transitions undertaken on all TReDS platforms including M1xchange, RXIL, and Invoicemart has doubled in FY22 to Rs 34,362 crore from Rs 17,080 crore amid Covid in FY21, and more than tripled from Rs 11,165 crore during pre-Covid FY20. The data was shared by MSME Minister Narayan Rane in Parliament in March this year. The overall transaction value since the inception of TReDS in 2017 stood at Rs 69,277.93 crore.

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