This growth is driven by higher corporate participation following the Union Budget’s reduction of the turnover threshold for on-boarding buyers.
Trade Receivables Discounting System (TreDS), the electronic platform designed to boost cash inflows of Micro, Small and Medium Enterprises (MSMEs), is anticipating an 80-100% increase in invoice financing volumes this fiscal year. This growth is driven by higher corporate participation following the Union Budget’s reduction of the turnover threshold for on-boarding buyers.
“In FY 2023-24, we processed over Rs 43,000 crore in invoice discounting on our platform. For the current fiscal year, we expect this to increase to Rs 80,000-90,000 crore. The number of corporates on the platform should double to 2,600,” said Sundeep Mohindru, Promoter & Director of M1xchange.
Receivables Exchange of India Ltd (RXIL) is also expecting the transaction volume on its platform to jump 80% this fiscal year. “Our platform saw over ?46,000 crore worth of transactions in FY24. This year, we are targeting ?85,000 crore,” Ketan Gaikwad, MD and CEO of RXIL, told FE.
Introduced by the RBI, TReDS is an online discounting platform designed to help MSMEs with their working capital by converting their trade receivables into cash. It is a three-player ecosystem including sellers (MSMEs), buyers (corporates, State & Central PSUs, government departments), and multiple financiers (banks & NBFCs).
RXIL, A Treds Ltd (Invoicemart), and Mynd Solutions Pvt Ltd (M1xchange) are the three RBI-approved TReDS platforms, which together processed over ?1.38 trillion worth of invoices in FY24. Another TReDS platform, C2FO Factoring Solutions, also went live in May.
The push to double transaction volumes comes in the wake of the recent Union Budget, where the finance minister reduced the turnover threshold for mandatory onboarding of corporates from ?500 crore to ?250 crore. Until now, only corporates with over ?500 crore turnover were required to participate in the TReDS platform.
