MSMEs alert! Good news - Fund to support free onboarding is here from SIDBI
In a good news for micro, small and medium enterprises (MSMEs), Small Industries Development Bank of India (Sidbi) has confirmed that it has set up a fund.
In a good news for micro, small and medium enterprises (MSMEs), Small Industries Development Bank of India (Sidbi) has confirmed that it has set up a fund to support free onboarding for MSMEs on trade receivables discounting system (TReDS). The free onboarding of MSMEs would be available till September-end.
Swavalamban Crisis Responsive Fund
-The fund, Swavalamban Crisis Responsive Fund, is an open-ended fund and the target is to onboard 10,000 MSMEs during the period.
-Usually, an MSME has to pay a fee of Rs 5,000 to Rs 10,000 for getting registered on a TReDS platform.
-The fund would be utilised to offset the cost of joining/registration fee on the TReDS platform
- Three TReDS platforms -- Receivables Exchange of India Ltd (RXIL), M1xchange and Invoicemart -- will help MSMEs gain access to working capital through invoice discounting via multiple financiers.
Trade receivables discounting system (TReDS)
TReDS is an electronic platform where receivables of MSMEs drawn against buyers, including large corporates, public sector undertakings and government departments, are financed through multiple financiers at competitive rates through an auction mechanism.
"The present endeavour aims at offering relief to the MSMEs during these challenging times. We are hopeful that MSMEs shall maximise this opportunity to on board TReDS, thus getting much-needed breather from severely crunched cash flow," Sidbi Chairman and Managing Director Mohammad Mustafa said.
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