M1xchange Achieves Rs 32000 Crore Milestone in MSME Financing

ENA MSME 2024-11-20 17:05:03 New Delhi, Nov 20 (KNN) In a landmark development for India's micro, small, and medium enterprises (MSMEs), invoice discounting platform M1xchange has reported a 100 per cent year-on-year business growth, reaching Rs 32,000 crore in the first half of FY24-25. The achievement underscores the platform's pivotal role in reshaping alternative financing and bridging the MSME credit gap. Indias MSME sector, comprising 64 million enterprises, faces a staggering credit gap of Rs 20 25 lakh crore, according to CRISIL. Despite contributing significantly to the economy, only 20 per cent of MSMEs have access to formal credit. To address this, the government has championed initiatives such as the Trade Receivables Discounting System (TReDS), an RBI-backed platform enabling MSMEs to sell trade receivables to financial institutions for better cash flow. M1xchange has amplified these efforts through its innovative Small-to-Small (S2S) financing model. Targeted at tier-2 and tier-3 MSMEs, the model facilitates early payments at competitive rates, fostering financial inclusion and liquidity among smaller enterprises. However, challenges persist. Many MSMEs remain unaware of TReDS and its benefits, while others struggle with regulatory compliance, digital literacy, and documentation requirements. These barriers disproportionately affect rural and micro enterprises, limiting their ability to onboard TReDS and benefit from formal credit mechanisms. The digital divide is a significant hurdle, noted industry experts, highlighting that many MSMEs lack the infrastructure or skills needed to navigate online platforms like TReDS. Compliance with tax regulations, including GST, further complicates the onboarding process for small enterprises. Despite these challenges, optimism abounds. In the last two years, awareness of TReDS has surged, with over 100,000 MSMEs onboarded, said Sundeep Mohindru, Promoter & Director of M1xchange. Adoption by private corporations has also grown, reducing business costs by 5-7 per cent of the financed amount and ensuring early payments for MSMEs. As platforms like M1xchange drive awareness and ease accessibility, the MSME financing landscape is poised for transformation, empowering enterprises to grow and thrive in Indias evolving economy. (KNN Bureau) 39981 https://knnindia.co.in/news/newsdetails/msme/m1xchange-achieves-rs-32000-crore-milestone-in-msme-financing 2024-11-20 17:05:03 knnindia.co.in M1xchange Achieves Rs 32000 Crore Milestone in MSME Financing