Rajasthan Govt Partners With M1xchange, RXIL To Boost TReDS Adoption Among MSMEs

Jaipur, Oct 8 (KNN) Rajasthan’s Department of Industries and Commerce has signed agreements with M1xchange and Receivables Exchange of India Ltd (RXIL) to expand adoption of the Trade Receivables Discounting System (TReDS) among micro, small and medium enterprises (MSMEs), aiming to address delayed payments and improve access to working capital.

TReDS enables MSMEs to convert accepted invoices into early payments by allowing authorised financiers to discount receivables at competitive rates. This can reduce dependence on costly short-term borrowing and help smaller firms manage wages, raw material purchases and production.

The initiative comes amid stronger regulatory focus on payment discipline. A November 7, 2024 notification made TReDS registration mandatory for companies with turnover above ₹250 crore and all central public sector enterprises. A June 30 notification further required operating central public sector enterprises to settle MSME purchase invoices through RBI-authorised platforms, The Economic Times reported.

To support implementation, the Department has circulated a standard operating procedure (SOP) to state departments and related bodies, covering departments, boards, corporations, authorities, institutions and MSME vendors and suppliers.

Under the agreements, the department will work with M1xchange and RXIL to promote TReDS adoption, create awareness and support relevant stakeholders in using the platform.

The move is aimed at making faster invoice realisation part of procurement efficiency while improving liquidity for MSMEs. Faster payments can help smaller firms avoid production disruptions, manage demand fluctuations and take on additional orders without relying heavily on debt.

Rajasthan’s initiative also aligns with the broader national push to bring more large buyers and public sector entities onto TReDS, potentially making digital invoice financing a more routine source of working capital for MSMEs.

(KNN Bureau)