Receivables Exchange of India Ltd (RXIL), a leading invoice discounting platform for MSMEs, has achieved a monthly throughput of ₹2,000 crore for the first time in the month of March 2022.
Launched in 2016, this Trade Receivables e-Discounting System (TReDS) platform, the first in the country that has completed five years of existence, has doubled its business volumes to over ₹13,400 crore in 2021-22 as against business of ₹6,500 crore recorded in the previous fiscal.
Encouraged by this doubling of growth year-on-year, RXIL is now expecting to double the business volumes again in the next financial year, said Ketan Gaikwad, Managing Director & CEO, RXIL.
“RXIL achieving the throughput of ₹2,000 crore in the month of March 2022 and doubling the throughput of over ₹13,400 crore in FY21-22 is a testament to the growing popularity of the TReDS platform for MSMEs to discount their receivables from corporates,” Gaikwad said.
Effective initiatives
He said that TReDS has endeavoured to revamp the cash flow issue of the MSME sector by streamlining their credit cycle by receiving their payments with zero delays. Initiatives such as digital onboarding and free registrations for MSMEs and market-driven lower cost without recourse funding have fostered the TReDS adaptability among various stakeholders, Gaikwak added.
“Permitting non-factor NBFCs to be a part of the TReDS platform will strengthen the pool of financiers who can lend against lower-rated corporates, making the platform accessible to the larger set of MSMEs,” he said.
Till date, RXIL has onboarded close to 10,000 MSMEs and helped finance over 13 lakh invoices worth over ₹23,000 crore. RXIL is a joint venture between Small Industries Development Bank of India (SIDBI) and the National Stock Exchange (NSE) with State Bank of India, ICICI Bank and YES Bank as other stakeholders.
What is TReDS?
TReDS is an electronic platform for facilitating the financing/discounting of trade receivables of micro, small and medium enterprises through multiple financiers. These receivables can be due from corporates and other buyers, including government departments and public sector enterprises.
One of the big benefits of TReDS is that MSMEs are not required to give collateral and there will be no recourse to them in case of defaults. It maybe recalled that the first transaction on TReDS in India happened on January 9, 2017 and this transaction was put through RXIL.
There are three main TReDS platforms operating in the country. If put together, they have done transactions worth ₹65,000 crore. Of this, PSUs contribution is hardly ₹4,500 crore.