M1xchange launches CGTMSE guarantee and small-to-small financing on TReDS for Maharashtra MSMEs

Maharashtra aims to become a $1 trillion economy, and for that the state's industries, big and small, need to get money on time. With this in mind, M1xchange has come out with a major plan.

M1xchange is India's RBI-approved TReDS platform, which helps small businesses turn their invoices into cash quickly. Two new features have now been introduced on the platform: a CGTMSE guarantee, and small-to-small (S2S) financing. Both are expected to benefit Maharashtra's MSMEs considerably.

According to the Udyam portal, more than 1.20 crore MSMEs are registered in Maharashtra, the largest number in any state in the country. The state has manufacturing, engineering, auto parts, pharmaceutical companies, textiles and the services sector, so the need for working capital is also very high.

M1xchange has already built a wide presence in Maharashtra. Of the MSMEs on its platform, 18 per cent are from Maharashtra alone, and so are 20 per cent of the large corporates. Invoices worth more than Rs 75,000 crore on the platform have come from Maharashtra. The company now wants to go deeper into industrial areas such as Mumbai, Pune, Nashik, Thane and Navi Mumbai.

The biggest change is that TReDS will now offer CGTMSE guarantee. M1xchange is the country's first platform to have completed transactions using such a guarantee. Banks and finance companies will now lend to small businesses with greater confidence, as they get a government guarantee. Checking invoices and obtaining the guarantee are now fully digital, which makes the process much faster.

Earlier, invoice transactions on the platform took place only between a large company and a small one. With S2S, a small business can now also discount another small business's invoice. This means one MSME can get money from another MSME quickly. In Maharashtra, S2S financing has so far given more than 360 MSMEs Rs 400 crore, with more than 2,600 transactions.

Manish Arora, S2S business head at M1xchange, said, "Maharashtra has the country's largest and most diverse MSME ecosystem. To realise the state's $1 trillion dream, money must reach the last link of the supply chain. With the help of both CGTMSE and S2S, we can reach even the smallest supplier."

Overall, M1xchange has so far enabled industries to receive payment for invoices worth more than Rs 3.60 lakh crore. More than 80 banks, 15,000 corporates and 1.10 lakh MSMEs are connected to its platform. Maharashtra is expected to have the largest share in all of this.