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What Is TReDS?
The digital revolution has shortened distances and expanded business outreach. To expand business while keeping it stable, having steady cash flow is the most essential thing and critical for the growth of Micro, Small, and Medium Enterprises (MSMEs). To give a boost to MSMEs and improve liquidity for their functioning, the Trade Receivables Discounting System (TReDS) was brought into being. This initiative is RBI-regulated and was introduced in 2015 and provides an electronic platform for MSMEs to discount their invoices and access working capital.
DTX, a forerunner in supply chain financing, offers a seamless RBI-licensed TReDS platform that empowers businesses with faster invoice discounting, improved financial stability, and hassle-free transactions.
How TReDS Help MSMEs
TReDS, an electronic platform helps with the financing of trade receivables for MSMEs from corporate buyers through multiple financiers. It significantly reduces MSMEs dependency on traditional credit lines and ensures quick cash flows in turn improves liquidity and operational efficiency.
The TReDS platform allows MSMEs to list their invoices, which multiple financiers can competitively bid on, giving MSMEs the flexibility to choose the best discounting option. Bidding on invoices not only brings down financing costs but also creates arbitrage opportunities for financiers as it allows financiers to earn returns.
TReDS brings financial stability, ensures timely payments to suppliers, reduces working capital constraints, and fosters stronger buyer-supplier relationships. Additionally, the platform ensures regulatory compliance by maintaining a transparent, digital, and standardized process for invoice financing, aligning with RBI guidelines.
How Does The TReDS Portal Work?
Key Benefits Of The TReDS Platform
Government Regulations & TReDS
The GoI has introduced several initiatives to promote the adoption of TReDS:
Mandatory Registration:
Companies with a turnover of over INR 250 crore must register on the TReDS platform by 31st March 2025.
Integration with GeM:
The Government e-Marketplace (GeM) is linked with TReDS, making transactions seamless.
Policy Enhancements:
Continuous updates by RBI to encourage timely payments to MSMEs.
The RBI’s approval of TReDS platform has reenergised the MSME financing, and DTX stands at the forefront of this transformation. As a leading Trade Receivables Discounting System (TReDS) platform, DTX helps MSMEs to scale efficiently by unlocking instant, collateral-free working capital through digital invoice discounting.
DTX bridges the gap between businesses and financiers, ensuring seamless cash flow without disrupting operations.
As per GoI’s new mandate, companies with a turnover of over INR 250 crores and all Central Public Sector Enterprises (CPSEs) are now mandated to onboard a TReDS platform, bringing in better participation and compliance monitoring by the Registrar of Companies (RoC).
For MSMEs
this will bring financing without recourse, giving businesses a level playing field to grow without additional liabilities. This will also ensure faster payments, competitive financing rates, and zero collateral requirements.
For Corporates
DTX optimizes procurement costs and enhances vendor financing negotiations through competitive bidding from multiple financiers. This cements supply chain partnerships and guarantees better cash flow for sellers, bringing disruptions to an absolute minimum.
For Financiers
DTX helps them build a PSL-compliant asset portfolio, unlocking new lending opportunities in a rapidly expanding credit ecosystem.
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