BoM and M1Xchange partner for MSME bill discounting

For Micro, Small and Medium Enterprises (MSME) bill discounting, State-owned Bank of Maharashtra (BoM) has partnered with M1Xchange Trade Receivables Discounting System (TReDS) platform.

As soon as the bills are raised by MSMEs and approved by large corporates on TReDS platform, banks or financiers can bid for them based on the risk rating of large corporates, BoM said.

MSMEs will receive their dues from the banks or financiers without waiting for the credit period agreed with large corporate, it said, adding that the shortening of payment cycle and the smooth flow of liquidity through the platform will ensure that MSMEs do not lose out on business opportunities due to shortage of funds.

TReDS is a digital platform to support MSMEs to get their bills financed at a competitive rate through an auction where multiple registered financiers can participate.

The main purpose of TReDS platform is to facilitate smooth flow of liquidity in the system and make finance available at a competitive rate, it said.

The cost of funds will be reduced for MSMEs as banks will be bidding based on the risk rating of a corporate.

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