Factoring, TReDS Adoption Can Boost MSME Liquidity And Export Competitiveness: Industry Leaders

Mumbai, Jul 2 (KNN) Senior industry and financial sector leaders said greater adoption of factoring and the Reserve Bank of India (RBI)-regulated Trade Receivables Discounting System (TReDS) can significantly boost MSME liquidity and strengthen their integration into global value chains. 

The remarks were made at an event organised by the Export-Import Bank of India (India Exim Bank) and World Trade Center (WTC) Mumbai, in association with the All India Association of Industries (AIAI).

Harsha Bangari, Managing Director, Exim Bank, noted that the bank is committed to building globally competitive MSMEs by supporting exports through innovative financing, market access, and capacity-building. 

"We have a subsidiary operating from GIFT City that undertakes factoring business to support MSMEs with timely access to working capital. Through factoring, MSMEs can unlock the value of their receivables and strengthen their ability to participate in global value chains. If the buyer’s credit profile is strong, it becomes easier for MSMEs to get their invoices factored and improve liquidity," Bangari added.

Export Readiness and Compliance

Rajesh Kumar Mishra, Director, Indian Institute of Packaging and Additional Director General of Foreign Trade, underscored the importance of packaging quality, international standards compliance, and regulatory adherence in enhancing export readiness. 

He said, “Quality packaging, adherence to international standards and regulatory compliance are essential for improving India’s export competitiveness. MSMEs should leverage government initiatives such as the Export Promotion Mission (EPM), which focuses on affordable trade finance through Niryat Protsahan and export readiness, market intelligence, quality compliance and competitiveness through Niryat Disha.”

Vijay Kalantri, Chairman, WTC Mumbai and President, AIAI, highlighted that India has crossed USD 870 billion in exports this year and is targeting over USD 1 trillion next year, emphasising that MSMEs—producing more than 12,000 products—must remain central to the country’s growth strategy to achieve this goal.

Kalantri said, “As a member of the RBI Standing Committee, we have recommended timely and adequate credit support for MSMEs through an online, transparent system with real-time tracking of credit flows.” 

Greater TReDS adoption could enable faster invoice financing and improve working capital access, with effective implementation potentially supporting 3 to 5 per cent growth in MSME manufacturing while boosting employment, exports, and GDP, he added.

(KNN Bureau)