TReDS to Boost MSME Financing as US Tariffs Drive Up Global Trade Costs: M1xchange

New Delhi, Aug 11 (KNN) M1xchange, a leading Trade Receivables e-Discounting System (TReDS) platform, recorded invoice discounting worth over Rs 8,000 crore in FY 2025—double the volumes of the previous year.

According to founder-director Sundeep Mohindru, rising U.S. tariffs are pushing up costs and reshaping trade flows, creating fresh challenges for Micro, Small, and Medium enterprises (MSMEs), reported Business Standard.

Many of these businesses face stretched payment cycles, making quick and affordable access to working capital essential.

TReDS is emerging as a critical solution by enabling MSMEs to receive payments in less than 24 hours at competitive rates.

This fast funding helps businesses manage higher input costs and market volatility without compromising growth.

Mohindru noted that with the current global economic pressures, the role of TReDS in sustaining MSME health has become more significant than ever.

Policy measures are also driving wider adoption. The government has lowered the turnover threshold for mandatory TReDS registration, enabling more MSMEs to participate.

In addition, the Small-to-Small (S2S) financing model is being promoted to facilitate invoice discounting between MSMEs themselves, reducing dependence on traditional banking channels.

The S2S initiative is backed by a Credit Analytics Engine that assesses creditworthiness using data from bank statements, GSTN records, and TReDS transaction history.

Once cleared, MSMEs can access early payment funding, which lowers costs for both buyers and sellers, improves cash flow, and enhances competitiveness.

Mohindru stressed that as MSMEs grapple with tariff-driven cost increases, TReDS must continue to offer flexible financial support.

By doing so, it can help businesses not only survive current challenges but also strengthen their position in global markets.

(KNN Bureau)