Unlock faster payments and
boost cash flow with TReDS

Why TReDS?

Trade Receivables Discounting System is a welcoming step by the RBI to regulate the trade receivables between MSMEs, large corporates and financiers. This is beneficial not just for these individual players, but for the entire economy of the nation.

To decrease the financing concerns faced by MSMEs in India, RBI introduced the concept of TReDS in 2014, an institutional mechanism for financing trade receivables on a secure digital platform. Trade receivable exchanges such as M1xchange, are helping the MSME supplier get early payment against their invoices with minimum paperwork in just 24 hrs. Since invoice discounting on TReDS ensures regular payment and optimized cash flow, many MSMEs are now using TReDS as their preferred mode of payment.

TReDS addresses the gaps in MSME industry as enterprises face challenges in getting their payments on time, thus creating working capital discrepancies. TReDS is a timely and effective solution to drive the MSME sector to the next phase of Indian economy.

Business Transactions Boosted

In the process of bill discounting, MSMEs (Supplier) can upload their invoices on any Trade Receivable Exchange of their choice. The invoice is then verified and approved by the Corporate (Buyer). After the invoice is approved, the Financiers (NBFC/Banks) bid against the uploaded invoice. This unique bidding mechanism gives the supplier an option to select the most suitable bid. The exchange calculates the final transaction amount and funds get transferred from Financier's bank account to the Supplier’s account. The amount is later paid to the financier by the buyer on the mutually agreed terms. Since TReDS works in a digital ecosystem, the registration process involves one-time documentation only. All the data is stored in a secure digital format, thus the discounting process involves no paperwork on M1xchange.

Coming to the overall benefit of this system. Suppliers enjoy collateral-free without recourse financing at a rate much lower than a bank loan. The corporate buyers, on the other hand, get an extension on days payable helping them better manage their working capital. Since the corporates are enabling their MSME supplier to get paid in a matter of a few days, they are in a comfortable position to negotiate on the overall cost of procurement. Financiers can build quality PSL Asset portfolio in MSME space with reduced risk of default.

Why M1xchange TReDS?

An RBI-regulated institutional mechanism

Funds credited to the supplier's account in 24 hrs

Selection of optimal factoring partners

An alternate, efficient funding system for making vendor payments

Quick financing of trade receivables at competitive rate

Financiers fulfilling PSL targets efficiently and in less time

Dont’ just take our word for it!

Get started with hassle-free bill discounting on M1xchange, India's premier TReDS platform

Get in touch to discover the benefits of M1xchange.