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MSME Credit Guarantee Live for Invoice Financing on TReDS, Boosting Small Business Access to Funds
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News18•22-09-2026, 21:30
MSME Credit Guarantee Live for Invoice Financing on TReDS, Boosting Small Business Access to Funds
- •The government's credit guarantee cover for invoice financing through the Trade Receivables Discounting System (TReDS) is now operational, making it easier for micro and small businesses to get money against unpaid invoices.
- •This mechanism provides guarantee support to banks and financiers lending against eligible invoices from micro and small enterprises, reducing lender risk and expanding access to working capital.
- •Announced in the Union Budget 2026-27, the measure is operationalized via the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to improve credit availability for MSMEs.
- •TReDS allows MSMEs to secure financing from banks or financiers against approved invoices, addressing working capital needs without waiting for buyer payments.
- •M1xchange became the first TReDS platform to operationalize the CGTMSE guarantee mechanism, completing the first transaction backed by the credit guarantee cover.
Key Questions Answered
The government has operationalized a credit guarantee cover through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to support banks and financiers lending against eligible invoices on TReDS, thereby reducing lending risks and expanding working capital access for small businesses.
M1xchange became the first TReDS platform to operationalize the CGTMSE guarantee mechanism and successfully completed the first transaction backed by this credit guarantee cover.
On the TReDS platform, financiers can check invoice eligibility, apply for the guarantee cover, let the system automatically calculate the guarantee fee, and instantly generate the cover note.
