Welcome step by Reserve Bank of India’s (RBI) decision to remove diligence requirements for onboarding onto the TReDS (Trade Receivables Discounting System) platform.
This move is designed to simplify how small businesses access credit.
*Policy Shift:* The RBI is removing the rigorous due diligence previously required for MSMEs to join TReDS. This is intended to speed up the onboarding process and reduce “friction” in invoice financing.
*Addressing the Credit Gap:* Currently, nearly ₹8.1 lakh crore is locked in delayed payments to MSMEs. The total funding requirement for the sector is projected to jump from ₹50 lakh crore (2025) to *₹162.92 lakh crore by 2030*.
**Modern Lending:** Banks are moving away from traditional “collateral-based” lending toward *cash-flow-based* models, using data from GST trails and account aggregators to assess risk.
* **Budget Mandate:** The government has mandated that all purchases from MSMEs by public sector units must be settled via TReDS, further integrating the platform into the national economy.
**Benefits:** Faster liquidity for exporters and supply-chain businesses, better working capital management, and a more predictable growth path for small enterprises.
Do you think that we will move from collateral based lending to pure receivable based lending ?? Pls share your view