Challenges

A report published by IFC, states that Indian MSMEs have a total addressable credit gap of is US$ 314bn (equiv ₹ 25.8 trillion) and only US$ 122bn (equiv ₹10 trillion) is financed by the organized financial sector (Banks, NBFCs, Rural Banks etc). Also, majority of the MSMEs receivables are caught up as delayed payments from their Buyers.

A.TREDS - TReDS platform, under brand name INVOICEMART, is solving these two problems of "access to credit" and "delayed payments" faced by MSMEs. By this it is helping in the formalization of the MSMEs into the economy. MSMEs can quickly convert their receivables into cash

Primary target

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Description of Innovation

- INVOICEMART is a digital market place where MSME can register and discount invoices on multiple buyers.
- It is a internet based platform and MSMEs can login through credentials provided by the platform
- TReDS is a b2b fintech market place where MSMEs can avail invoice financing "without recourse" /without providing any security
- As the financing is done by a bidding model and "without recourse" to MSME they get extremely competitive rates unlike the bilateral lending that they avail
- The platform can be accessed on the go and is a web based portal
- Financiers (Banks) which do not have a direct lending relationship or presence in city/town of MSME can still finance the MSME to build a priority sector lending portfolio
A.TREDS Ltd ( platform name: INVOICEMART) has set up a innovative B2B payment solution in the form of a digital market place to solve problem of "access to credit" and "delayed payments issue"

Results

The platform has the
- highest no of participants (MSMEs and Buyers/Corporates)
- highest volumes on TReDS resulting in
- the largest market share

As detailed earlier, the average financing on INVOICEMART - TReDS platform has been at 7.5 to 8pct p.a. with an average financing tenor of 90 days. This is a new model of working capital financing with invoices/receivables as the underlying negotiable instrument.

Some important platform statistics:
1. currently financing US$ 426+ mn (equiv ₹ 3500+ crs per month) with invoice value as less as ₹ 5000
2. Financing for Micro (income/turnover less than ₹ 5crs) and Small (income/turnover less than ₹ 50crs) constitute 80% of the financing on the platform
3. Granular database with no single corporate's invoices contributing to more than 10pct of the financing on the platform in a single month shows that MSMEs are able to discount invoices of more than 1 buyer.