India’s pre-festive financing volume has crossed Rs 20,000 crore in 2026, with micro enterprises emerging as the fastest-growing users of formal invoice discounting, according to a report by M1xchange. Pre-festive financing volume rose 33 per cent year-on-year from Rs 15,000 crore in 2025, as small businesses increased access to formal working capital ahead of the peak festive shopping period, the company said in its latest Festive Insights Report.
The report said financing for micro-MSMEs increased more than 100 per cent year-on-year, reaching around Rs 3,000 crore during the 2025 festive period. The trend points to greater adoption of formal invoice discounting among smaller businesses that have traditionally relied on informal sources of credit.
Average daily festive financing has increased more than 40 per cent year-on-year, according to the report. M1xchange expects overall festive-season financing to grow by around 30 per cent in 2026 as businesses prepare for higher demand and replenish inventories.
As of October 28, financing throughput during the current festive period had already reached approximately Rs 20,000 crore, exceeding the entire volume recorded during the previous year’s festive period, with the peak activity still underway.
The increase comes as MSMEs face a seasonal working-capital requirement, with suppliers often required to manufacture and deliver goods before receiving payments from larger buyers. Invoice discounting allows businesses to raise funds against approved trade receivables rather than waiting for payment cycles to end.
Sundeep Mohindru, Founder and Promoter of M1xchange, said the increase in micro-MSME financing showed that smaller enterprises were increasingly using formal credit to manage seasonal working-capital requirements. “Micro and small enterprises are no longer letting delayed payments restrict their seasonal growth,” Mohindru said, adding that TReDS was allowing businesses to convert unpaid invoices into working capital.
Consumer Goods Lead
The report also highlighted differences in invoicing activity across sectors during the 2023-25 festive periods. Consumer durables recorded an average 28 per cent increase in festive-period invoicing compared with the corresponding pre-festive period.
Chemicals followed with a 27 per cent increase, while FMCG recorded a 20 per cent rise and Metals and Mining saw invoicing increase 19 per cent. The trends indicate higher inventory replenishment and working-capital requirements during the festive demand cycle.
Emerging sectors also recorded sharp increases in activity. E-Retail and E-Commerce reported more than 100 per cent growth, while the Paints segment also saw a significant increase in festive-period activity, although the report noted that its growth came from a smaller base.
The report said the financing trends indicate changing credit requirements across businesses participating in the festive supply chain, particularly as smaller enterprises increasingly use formal channels to manage cash flows.
M1xchange operates as a Trade Receivables Discounting System (TReDS) platform, facilitating financing of MSME receivables from corporate buyers through banks and non-banking financial companies. It said it has onboarded more than 81 banks, 16,000 corporates and 1.25 lakh MSMEs.
The platform said it has facilitated invoice discounting worth more than Rs 3.85 lakh crore. Under the TReDS mechanism, an MSME raises an invoice, the buyer validates it and financiers bid against the approved receivable, with the selected financier processing payment to the supplier.