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RBI’s TReDS Is Aiding MSMEs, Says Experts

Updated: Sep 28, 2023 01:15:35pm

RBI’s TReDS Is Aiding MSMEs, Says Experts

Visakhapatnam, Sept 28 (KNN) According to experts RBI’s Trade Receivables Discounting System (TReDS) has been helping out not only the big businesses but as well the MSMEs.

A seminar was held by the Confederation of Indian Industry (CII) on Wednesday on ‘Enhancing MSME Competitiveness through Bridging the Financial Gap’.


Delivering the keynote address, MSMEadvisor.com founder Rajendra Sinha said that the RBI-appointed UK Sinha Expert Committee on MSMEs recommended that the banks should develop customised products to assess the financing requirements based on expected cash flows, reported The Hindu. 

Also, banks need to build their ability to capture cash flows of MSME borrowers on a regular basis, for which tie-ups with industry majors, aggregators and online platforms are needed.

“RBI’s Trade Receivables Discounting System (TReDS) has been helping out not only the big businesses but as well the MSMEs. Bill Discounting is an important tool for working capital financing for MSMEs as the seller on registering on Receivable Exchange of India (RXIL) gets the payment immediately when their invoices are purchased by the Banks/FIs on the online TReDS platform,” he added.

Pankaj Kumar, DGM – Visakhapatnam Circle, State Bank of India, said MSMEs contribute more than 30% to India’s GDP, 45% to manufacturing, 40% to exports and provides employment to over 113 million people.

SBI has financed over 15,000 MSME units in Visakhapatnam area. The market share of SME portfolio of the Visakhapatnam module has seen substantial growth in FY 2023. SBI is operating 15 dedicated SME Credit Intensive branches manned by 32 Relationship Managers (SME) for providing specialised service to the MSMEs, he added.

G. Srinivasa Sarma, branch in-Charge, SIDBI Visakhapatnam, said that from a technological perspective, there should be a small credit assessment-based SME lending procedure that is both flexible and affordable enough to accommodate the various SME business models.

P.P. Lal Krishna, Chairman, CII Visakhapatnam, said that with around 6.5 lakhs MSMEs, this sector contributes nearly 30% to the Indian GDP. This share of MSMEs in overall manufacturing of the country is 37%. The share of this sector in the overall exports stands at around 49%.  (KNN Bureau)


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