New Delhi, Mar 24 (KNN) Companies with annual turnover of Rs 250 crore are accelerating their registration efforts on the Trade Receivables Discounting System (TReDS) platform to meet the compliance deadline set by the Ministry of Micro, Small and Medium Enterprises (MSME). 

According to a government notification, all companies with turnover exceeding Rs 250 crore, along with Central Public Sector Enterprises (CPSEs) engaged in procurement from MSMEs, must register on the TReDS platform by March 31, 2025.

Currently, registration on the TReDS platform is mandatory only for CPSEs and companies with turnover exceeding Rs 500 crore. 

The recent directive expands this requirement to include a broader range of businesses, reflecting the government’s commitment to improving financial access for the MSME sector.

M1xchange director Sundeep Mohindru reported a significant increase in onboarding requests following the MSME Ministry’s notification issued on November 7, 2024. 

“Before the notification, the average number of corporate onboardings per month was around 30 corporates per month. However, this number has more than doubled in the months following the announcement,” Mohindru stated.

The platform has witnessed substantial growth in corporate participation during the current fiscal year. In the first half of FY25, M1xchange recorded 200 new corporate onboardings. 

This figure has doubled to 400 corporates during the second half, demonstrating the accelerated pace of compliance in recent months.

TReDS was introduced by the Reserve Bank of India in 2015 specifically to address the persistent challenge of delayed payments to the MSME sector. 

Over time, the system has evolved and increasingly ensured timely payments to MSMEs on reasonable terms, improving cash flow for smaller businesses.

The digital platform enables MSMEs to sell their trade receivables to banks and financial institutions at discounted rates, thereby accessing immediate liquidity without waiting for extended payment terms from larger corporate buyers.

To enhance credit facilitation for small businesses, the Ministry of MSME has established formal agreements with the three authorised TReDS platforms—M1xchange, Invoice Mart, and Receivables Exchange of India Ltd (RXIL). 

These platforms have been integrated with the Udyam Portal, creating a comprehensive ecosystem to support MSME financing needs.

(KNN Bureau)