What Is TReDS?

TReDS (Trade Receivables Discounting System) is an online platform regulated under the RBI framework to address cash flow issues faced by MSMEs. TReDS platforms provide a transparent and secure environment where suppliers, buyers, and financiers interact on a single interface.

With TReDS registration, you can access a wide network of financiers, ensuring quick and collateral-free access to working capital. This competitive process enables suppliers to secure the best financing rates.

RBI-licensed TReDS platforms, such as KredX DTX, enhance this system by offering integrated solutions to meet diverse business needs. As per the Ministry of MSME (MoMSME), TReDS registration is mandatory for entities with a turnover exceeding ₹250 crore, making it a crucial tool for supplier empowerment.

TReDS platforms in India strengthen the ecosystem by promoting growth, financial inclusion, and a more resilient supply chain.

What Is TReDS?
How TReDS Help MSMEs

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

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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.

How It Works

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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Frequently Asked Questions

TReDS (Trade Receivables Discounting System) is an RBI-regulated online platform designed to help Micro, Small, and Medium Enterprises (MSMEs) improve cash flow by converting their pending invoices into instant working capital.

The entire process is transparent as it begins by suppliers uploading invoices on the platform, buyers approving them, and then multiple financiers competitively bid to offer the best discounting rates. The Supplier receives early payment while the buyer pays the financier on the invoice due date, ensuring faster payments and improved liquidity.

TReDS registration is open to Suppliers, Corporate buyers including government departments and Public Sector Enterprises (CPSEs), and financiers such as banks, NBFCs, and other RBI-approved financial institutions. Companies with turnover above ₹250 crore and CPSEs are mandated to register on TReDS platforms by March 31, 2025.

Yes, the Government of India has ensured compliance that all companies with a turnover exceeding ₹250 crore and all Central Public Sector Enterprises (CPSEs) must register on a TReDS platform. This ensures timely invoice payments to MSMEs and promotes financial inclusion.

TReDS offers MSMEs multiple benefits including access to fast, collateral-free working capital, competitive discounting rates through open bidding by financiers, reduced reliance on traditional, costly credit lines, improved liquidity, and timely payments. It also fosters stronger buyer-supplier relationships and ensures regulatory compliance with RBI guidelines.

No, TReDS operates on a non-recourse basis, meaning there is no requirement for the participants to provide collateral or personal guarantees for invoice discounting. The risk of repayment lies with the buyers creditworthiness, making it easier and safer for MSMEs to access working capital without additional liabilities.