Jahnavi– Due to recent tough compliances and multiple other reasons MSMEs are shutting down there businesses and in these circumstances how trade receivable can play an important role for the growth of MSMEs.
Sundeep -Over the last decade, there is a shift towards leveraging technology in assessing, channelizing, monitoring, and collection of debt. In terms of bringing a paradigm change in leveraging technology for inclusive growth, the expansion of Direct Benefit Transfer Schemes is undoubtedly nothing short of a revolution in the way cash support/subsidies was made available to the beneficiaries. Although, the DBT is more to do with better governance rather than technology, it demonstrated to the Indian people the power of technology to unshackle inefficiencies in distribution of credit! Thus followed roll out of the Trade Receivables e-Discounting System of India, or simply TReDS as it would become commonly known as, to provide viable, technology driven trade liquidity to the MSMEs. M1xchange has been instrumental in reaching out to almost 18000+ MSME enterprises engaged in providing goods and services to Industry Majors and Large Corporates so that their trade liquidity needs are met digitally, at market driven price through a digitally enabled bidding platform plugged into an equally secure and technology enabled funds settlement system.
Jahnavi– There are very few number of large MSMEs are in the business providing goods and services to the corporate which is around 5 to 10 percent of their MSMEs. So how smaller MSMEs manufacturing machinist will be benefited out of these.
Sundeep -TReDS enables MSME sellers to use an auction mechanism to discount invoices/ bills raised on Corporates, other MSME buyer entities, Government departments and Public Sector entities, thereby assuring conversion of receivables into cash within T+1 days, at extremely competitive market rates, by leveraging the credit profile of the parties involved. M1xchange provides collateral-free financing opportunity through TReDS to serve the unmet credit needs of MSME buyers and MSME sellers at very attractive pricing as compared to the market pricing of unsecured loans. M1xchange TReDS benefits are available to the MSME entity on two counts, one towards its MSME suppliers (for procurement of goods and services) and second towards its Customers (for sales). It means a 360 degree working capital support is available at TReDS platform.
Jahnavi– What is the minimum and maximum invoice amount presented in the exchange which is finance by public sector banks.
Sundeep– It has been observed that roughly 10% of MSMEs are working on a larger scale, in order to cover the highest portion of MSMEs, the minimum amount presented was as low as Rs 500 and can go up to 15 crores depending on the demand and facilitation services.
Jahnavi– What is general rate of interest offered by Financial institutions in your exchange.
Sundeep-Rate of interest charged by financial institutions at M1xchnage is much competitive than MSME loans and these rate of interest is depending on many factors however the earlier minimum rate was 4% and the current minimum rate of interest is 6.75%
Jahnavi– How many days exchange takes to release the fund once product is delivered by the manufactural.
Sundeep– Small or medium enterprises raise Invoices against the Corporates (Enterprise/Blue-chip Company/PSUs) for the services provided/goods supplied. The credit period of the invoices. (tenor) normally range from 120 days to 180 days.To avoid the delay in collections and reduce the risk of collection, they can bring their invoices for Invoice Discounting to TREDS M1xchange and manage collections efficientlyIn 24hrs – 48Hrs.
Jahnavi– How many such manufacturing MSMEs are availing this facility from your exchange.
Sundeep– MSME sought for trade receivable services to avoid delayed payments, Get access to collateral free and non-recourse working capital, business expansion, early payments .We are growing 50% every year in case of MSME registration and during FY we have added 6000 MSMES and right now total number of MSMEs are 18000+.We are expecting this number to touch 25000 by end of March 2024.