Credit and finance for MSMEs: TReDS platform M1xchange on Monday said it has signed a memorandum of understanding (MoU) with the MSME ministry to enable MSMEs with Udyam registration register on M1xchange to discount their invoices. The MoU was signed during the national seminar on the growth and development of MSMEs in Imphal, Manipur on November 20, 2022.
Amit Sachdev, COO at M1xchange signing the MoU said MSMEs will benefit from a two-way exchange of information between the Udyam portal and M1xchange. While Udyam MSMEs will be able to access liquidity at the lowest possible cost in the country, “the information flow from M1xchange to Udyam will enrich the Udyam database enabling MSMEs to benefit from several MSME-focused government initiatives.”
According to the company, it has facilitated bill discounting of more than Rs 37,000 crores to over 14,000 MSME suppliers across 1,400 towns in India with the payments for the invoices discounted credited to MSMEs within 24 hours.
RBI-licensed TReDS is an electronic platform for facilitating the financing of trade receivables of MSMEs through multiple financiers. According to the central bank, these receivables can be due from corporates and other buyers, including government departments and public sector undertakings (PSUs).
The MoU signing comes days after the company announced raising Rs 38 crores from its existing investors B2B platform IndiaMART and venture capital fund Beenext for an additional 3.4 per cent and 1.99 per cent equity stake respectively. The deal marked the exit of M1xchange’s early investor India Opportunities Fund by SIDBI Venture Capital, the VC arm of SIDBI.
Apart from M1xchange, other TReDS platforms licensed by RBI are RXIL, Invoicemart, and the online marketplace for working capital solutions C2FO.
The aggregate invoices financed in FY22 had recorded a steep rise to Rs 34,362 crore from Rs 17,080 crore invoices financed amid Covid in FY21. The value had more than tripled from Rs 11,165 crore during pre-Covid FY20, according to the data shared by MSME Minister Narayan Rane in a written reply to a question in Rajya Sabha in March this year. The overall transaction value since the inception of TReDS in 2017 stood at Rs 69,277.93 crore.