TReDS platform M1xchange crosses Rs 10,000 crore worth of bills discounting serving MSMEs across 352 cities in India
More than Rs 10,000 Crore throughput volume
MSMEs across 352 Cities used the TReDS Platform during the lockdown period
Access to funds at around 5 per cent pa, much lower rate through the platform
Approx Rs 3500 crore worth transactions in 3quarters of 20-21
M1 is actively contributing lion’s share of the total sector’s growth
by Priya J
December, 2020, Mumbai, M1Xchange, among the three official license holders in India to set-up a digital marketplace that can sell the receivables of MSMEs to banks/NBFCs to facilitate the discounting of invoices and bills of exchange on a PAN India basis has crossed Rs. 10,000 crore recording the fastest growth & contributing to 37% of the sector’s growth. All exchanges together have done 9,500 crores worth of bill discounting so far in 2020-21. With the fastest & maximum corporate activation on M1Xchange, the total number of new corporate registrations have gone up by 20% post lockdown in 2020. The platform overall has funded more than 3500 cr worth of invoices of MSME vendors on M1Xchange.
The unique process of signing deed of assignment for every transaction on M1xchange make the digital process fully compliant under Factoring Act 2011. As a result the defaults are negligible and the confidence of banks is high.
During the beginning of the pandemic in March 2020, M1 stood at Rs 6,500 crores but due to steps taken in the direction of further enabling social distancing, full compliance & implementation of Digital On-boarding of MSMEs on the platform, M1change is now at Rs 10,000 crores. This paperless, digital onboarding has enabled MSMEs to complete their digital onboarding journey within 15 minutes, without usage of courier for delivery of documents.
Sundeep Mohindru, CEO of M1xchange says, “The beneficiary of the platform is MSME with reduced cost of funding and by selling the risk of receivables. However the benefit of this also flow to large corporate as their cost of doing business is reduced with reduction in interest cost for MSMEs. The adoption of Supply chain finance platform has gone up multifold post lockdown. The average monthly volume has surpassed Rs 600 crores in Dec, highest amongst the exchanges. This goes to say the adoption has increased multifold this year, especially post lockdown and average volumes have grown by 40% in Q2 and Q3 versus FY 19-20.”
The improved usage of the platform experienced in Q2 and Q3 is expected to continue in Q4 as well. More so since the economy seems to have overcome the Covid induced slow down. It is widely expected that in Q4 GDP growth will turn positive. For 1921-22, India is expected to be among the fastest growing economy in the world with 9 per cent growth rate in GDP.
“In view of the present trend and expected take off in the economy”, said Sundeep Mohindru, “we are hopeful of touching Rs 6000 crore through put in 2020-21. Even if we maintain the current trend, we will reach Rs 10,000 crore through put in the next fiscal year of 2021-22”.
MSMEs across 352 Cities have logged into TReDS Platform since the pandemic/ outbreak and have discounted invoices at rate of interest ranging between 4.75% pa to 8% pa. 60% of such MSME Enterprises are from Tier 3 & Tier 4 Cities and are able to take the benefit of this digital revolution.
Started in 2017 under licence from RBI, M1xchange has scaled up to discount invoices worth more than Rs 10,000 crore. Recently last month, Beenext Asia , Singapore and Mayfield jointly made an investment of USD 4.5 Million in the current equity round in M1xchange, largest among the three holders of the Trade Receivables Discounting System (TReDS) licences issued by RBI. The round was led by incoming investor BeeNext from Japan and existing investor Mayfield. As a bank agnostic platform with 35 banks on-board, M1xchange is the only TReDS platform wherein the assignment of receivables is done digitally for every transaction, in favour of the financing bank.
About M1Xchange:M1xchange is an RBI approved TReDS (Trade Receivable Discounting System) platform. TReDS is an institutional mechanism set up in order to facilitate the financing of trade receivables of MSMEs from corporate buyers through multiple financiers. TReDS will boost the Indian economy by solving the erratic cash flow problems of MSMEs caused due to slow paying invoices. M1Xchange has digitally transformed the vender payment ecosystem and the way MSMEs generate working capital. This has been achieved through seamless presentation of bills, their validation, discounting, and approval of funds on a single platform. There is no need for additional collaterals to raise money through the platform.