Government Plans GeM-TReDS Integration To Ease Invoice Financing For MSMEs

New Delhi, Jul 13 (KNN) The government is planning to integrate the Government e-Marketplace (GeM) with the Trade Receivables Discounting System (TReDS) to enable micro, small and medium enterprises (MSMEs) to seamlessly move from public procurement to invoice financing.

GeM-TReDS Integration To Improve Invoice Financing

The proposed integration follows the Centre's recent decision to mandate the settlement of invoices arising from government procurement from MSMEs through the TReDS platform.

Under the plan, MSMEs will be able to bid for government tenders on GeM, generate invoices and access invoice financing through TReDS without switching between platforms, helping improve cash flow and reduce payment delays.

Move Aims To Strengthen MSME Cash Flows

GeM serves as the government's online procurement portal for Central and state government departments, public sector undertakings and other public entities, reported Business Standard. 

The platform currently offers over 10,500 product categories and 350 service categories. Under the Public Procurement Policy, Central Public Sector Enterprises (CPSEs) are required to procure at least 25 percent of their annual purchases from MSMEs.

Commenting on the proposed integration, Anil Bhardwaj, Secretary General of the Federation of Indian Micro and Small & Medium Enterprises (FISME), said linking TReDS with GeM would enable MSMEs to obtain quicker invoice financing, reduce procedural delays in bill discounting and strengthen their working capital position.

The government is also working to expand cash flow-based lending for MSMEs. According to the official, efforts are underway to facilitate the financialisation of leveraged invoices and improve access to credit.

Account Aggregator Framework To Be Strengthened

To support the initiative, the government plans to deepen data integration under the Account Aggregator framework. 

While GST data are already available through the system, integration of GST returns is also being planned to provide lenders with a more comprehensive assessment of borrowers' cash flows, thereby improving credit access for MSMEs.

(KNN Bureau)