Receivables Exchange of India Ltd. (RXIL), a Trade Receivables Discounting System exchange platform, which helps micro, small and medium enterprises (MSME) auction their receivables and raise capital has seen a 20% increase in registration from Tamil Nadu during the lockdown.
Trade Receivables Discounting System (TReDS) is an electronic platform for facilitating the financing and discounting of trade receivable of MSMEs which are due from corporates and other buyers, including government departments and public sector undertakings. MSMEs auction the receivables and raise capital through multiple financiers. At present, there are three TReDS platforms — RXIL, M1xchange and A.TReDS.
“We have enabled close to 400 MSMEs from across engineering, textile and automotive sectors in Tamil Nadu and are noticing an uptick from MSMEs requesting to be a part of the platform,” said Ketan Gaikwad MD & CEO, Receivables Exchange of India Limited (RXIL).
RXIL was incorporated on February 25, 2016 as a joint venture between Small Industries Development Bank of India (SIDBI), the apex financial institution for promotion and financing of MSMEs in India, and the National Stock Exchange of India Limited (NSE). The registration charges on the platform have been waived off till September 30 under the SIDBI’s Swavalamban Crisis Response Fund.
“Tamil Nadu is a key region as it has over 7.72 lakh registered MSMEs, according to the annual report of MSME Ministry. Of the total MSMEs registered on the RXIL platform, about 15% are from Tamil Nadu and they largely belong to hubs like Trichi, Chennai and Hosur, with most of them engaged in manufacturing of heavy engineering products,” Mr. Gaikwad said.
The maximum number of MSMEs on RXIL’s TReDS platform are from Maharashtra, followed by Tamil Nadu and Delhi, he added.
Overall, RXIL has close to 3,000 MSMEs, 500 buyers and 35 financiers. However, a section of MSMEs are not convinced with the TReDS platform.
“At Present TReDS looks good only on paper. Most of the small and medium enterprises are not interested due to an extensive setup process. Moreover, the same cannot be done without the buyer’s concurrence,” said S. Vasudevan, joint secretary, Tamil Nadu Small and Tiny Industries’ Association. He also pointed out that the bill discounting should be an automatic process once the invoices were uploaded on the platform, instead of the bidding process.
Mr. Gaikwad said TReDS as a concept was still nascent and had still managed to provide financing worth ₹19,000 crore to around 11,000 MSMEs across the country in its three years of existence.
