M1xchange disbursed Rs210 Bn for MSME invoice discounting

The demand for financing via TReDS is growing at 100% y-o-y as it is creating a win-win solution for all stakeholders in the value chain

FinTech BizNews Service

Mumbai, December 15, 2023: The transformative impact of TReDS in Supply Chain Financing is reshaping the dynamics of financing for businesses. Sundeep Mohindru, Promoter & Director, M1xchange, updates: “The demand for financing via TReDS is growing at 100% y-o-y as it is creating a win-win solution for all stakeholders in the value chain. One of the key factors driving this growth is the high confidence of banks and NBFCs as the default of repayments on TReDS is negligible and the model operates on SaaS with no fixed cost of infrastructure to banks. With more financial institutions seeking to increase their financing to MSMEs through supply chain financing, this is a positive trend for MSME business growth.

Further, the increase in the number of corporates joining the supply chain finance bandwagon is also a key growth driver. Adopting TReDS helps build the robustness of their supply chain ecosystem, strengthen supplier relationship and reduce thereby also bringing down their business cost.”

M1xchange has disbursed INR 21,000 crore for MSME invoice discounting in the first seven months of the fiscal year 2023-24, vis-à-vis INR 23,000 crore disbursed in FY 22-23. Sundeep Mohindru explains: “This growth is attributed to the positive regulatory changes introduced in the past few quarters thereby making the adoption of TReDS an easier mechanism for Banks, Corporates and MSMEs. Further the ease of use for all SMEs and Corporates simplified vide digital mechanism has also enabled the wide usage of M1xchange across 1800 cities.”

With India welcoming the ever-increasing adoption of technology in the banking & fintech industry, the current age of AI & ML will further provide a boost to the ecosystem. The digitization wave has not only enabled fintech and banks but has also opened doors for MSMEs. Sundeep Mohindru elaborates: “Innovative technology in the invoice discounting space is enabling the availability of genuine financial and business data for MSMEs thereby allowing the flow of supply chain finance to multi layers of MSME enterprises, thereby serving the objective of Financial inclusion for the country. Capitalizing on these emerging trends will further accelerate the adoption of TReDS thus having a positive impact on the Indian economy. With each step towards resolving the working capital challenges faced by MSMEs, we envision a bright future for the sector in the coming year.”