Credit and Finance for MSMEs: A yr after the federal government recognized complete corporations with a turnover of greater than Rs 500 crore to onboard the commerce receivables financing platform TReDS, the registration rely is way from 100 per cent. According to the data obtainable from the MSME Ministry, 4,714 such corporations have been recognized by the Ministry of Corporate Affairs in April 2021. After filtering out corporations registered on TReDS and which have been central authorities enterprises, 1,661 corporations (35.2 per cent) had registered themselves as of April 1, 2022, on the TReDS platform.
“Letters issued to all Regional Directors/Registrar Of Companies (ROCs) to call a meeting of companies with turnover of Rs 500 crore and above and ensure that all such companies are onboarded on TReDS platform,” the ministry mentioned within the newest replace on MSME Dashboard with respect to TReDS registration.
“The companies are getting registered for compliance. Though registered, most of the companies are yet to start transactions on TReDs platforms. Post financing on TReDs platforms the buyer companies have to ensure the payments are made to the financiers on the due date. Any delay may lead to an overdue reporting scenario of buyers, shying these corporates to start transactions. However, we have seen an encouraging trend of corporates embracing TReDs and making the MSME payments through TReDs,” Ketan Gaikwad, Managing Director and CEO of one of many TReDS platforms RXIL advised Financial Express Online.
Back in 2018, the federal government, via a notification, had instructed public sector enterprises and all corporations with a turnover of Rs 500 crore or extra to register on TReDS. In September 2020 as effectively, the MSME Ministry had written to 500 corporates for clearing MSMEs dues and urged them to onboard TReDS. However, registration is just not obligatory but. MSME Minister Narayan Rane had knowledgeable Parliament in March this yr that the Reserve Bank of India has not made it obligatory for any purchaser, vendor or financier to take part on the platform.
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Delhi and Mumbai ROCs weren’t reachable for rapid feedback for this text. “As far as Karnataka is concerned, we had written to companies and I think almost all of them have registered on TReDS. We have closely monitored their registration, but we won’t be able to share the exact number of registrations,” CV Sajeevan, ROC, Bangalore advised Financial Express Online.
However, regardless of the 35 per cent registration on the platform, TReDS’ affect has been important. “From 2017 to 2021, TReDS had discounted invoices worth Rs 37,000 crore for MSMEs while in 2021-22 itself, Rs 36,000 crore invoices were discounted. If all the companies with over Rs 500 crore turnover are registered, the positive impact in terms of the value of invoices discounted will be at least over 3X. The borrowing cost for MSMEs via TReDS at 4-6 per cent is much lower than 12-15 per cent in borrowing from banks directly. The lower cost not just helps MSMEs become more competitive but their large customers as well whom they supply goods at competitive prices,” Sundeep Mohindru, CEO, M1xchange advised Financial Express Online.
Source: www.financialexpress.com”