• UGI USER
  • Mar 24, 2023
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Trade Receivables Discounting System (TReDS) Platform

News: The TReDS platform, which was created in 2014 to allow MSMEs to finance or discount their bills, finances about 35,000 factoring units (FU) per month, according to the RBI Governor.

 

The Trade Receivables Discounting System (TReDS) platform is an electronic tool that enables numerous lenders to finance or discount the trade receivables of Micro, Small, and Medium-Sized Enterprises (MSMEs).

These receivables may be owed by businesses and other purchasers, such as government agencies and PSUs. (PSUs).

Goal: To help MSME sellers manage their needs for working capital by enabling them to discount invoices submitted against big businesses.

MSMEs can receive payments more swiftly thanks to the platform.

 

Participants: On a TReDS platform, participants include sellers, purchasers, and funders.

TReDS only allows MSMEs to participate as sellers.

Companies, government agencies, public utility companies, and other entities can take part as purchasers in TReDS.

As long as the RBI approves, banks, NBFC-Factors, and other financial institutions may take part in TReDS as financiers.

Any buyer, vendor, or funder is not required to take part in TReDS by RBI.

Certain business categories must now register as buyers on the TReDS network, per government regulations.(s).

However, these entities are not required by the government regulation to conduct transactions in TReDS.