M1xchange to facilitate financing between AAI, Air India, AIE and their MSME vendors
The most thriving business sector MSMEs contribute 40% of India’s workforce
M1Xchange Trade Receivables Discounting System (TReDS) platform has forayed into the aviation sector by bringing on board Airport Authority of India (AAI), Air India and Air India Express. TReDS is a digital platform to support micro, small and medium enterprises (MSMEs) to get their bills discounted at a competitive rate through an auction where multiple registered financiers can participate. The recent permission granted to NBFCs to access the benefits of TReDS platform will add to the number of financiers while large PSUs from different sectors joining in will encourage cash strapped MSMEs to increasingly seek the benefits from the digital platform. Now the three leading aviation PSUs joining the platform will encourage other aviation companies to access the platform helping India’s large MSME players. TReDS is not only digital but due to the use of digital signatures for every transaction adds additional security to the system and it is GST compliant.
“The volume growth on M1xchange since its inception across sectors reflects its successful adoption by all the participants - MSME vendors, large corporates and banks. M1xchange team is happy to foray in aviation sector and join hands with the aviation sector’s 3 giants to expand further the digital payment eco system in India and support the growth of MSME businesses across the country.” said Sundeep Mohindru, CEO of M1xchange.
Mr. Shyam Sundar, CEO, Air India Express Ltd. said
"The TReDS platform provides MSMEs the critically important facility of obtaining quick easy and assured settlement of their invoices. Air India Express which is committed to promoting procurements from MSME is therefore extremely happy to be registered on the TReDS digital platform. In this connection, Air India Express has tied up with M1xchange platform."
Mr. Vinod Hejmadi, Director Finance, Air India Ltd. said
"We are looking forward to this one-stop solution to resolve all payment related issues. At this juncture our long trusted relationships with MSMEs across the country must be maintained strongly and the performance and delivery of TReDS will be a game changer.”
MSMEs, despite their vastly important role in the Indian economy, continue to face constraints in obtaining adequate finance particularly in their ability to convert trade receivables into liquid funds. Further, those MSMEs that have access to credit do so at very high interest rates. The TReDS system allows for these MSMEs to receive money upfront which enables them to solve their collection-related and working capital issues. Most importantly, it helps MSMEs boost their ability to re-invest in their businesses faster to increase turnarounds, overall scale and financial wellbeing. All this comes at discounting or interest rates that are as low as what their large high-credit rated corporate customers would ordinarily be accustomed to.
M1xchange is an RBI approved TReDS (Trade Receivable Discounting System) platform. TReDS is an institutional mechanism set up in order to facilitate the financing of trade receivables of MSMEs from corporate buyers through multiple financiers. TReDS will boost the Indian economy by solving the erratic cash flow problems of MSMEs caused due to slow paying invoices. M1Xchange has digitally transformed the vender payment ecosystem and the way MSMEs generate working capital. This has been achieved through seamless presentation of bills, their validation, discounting, and approval of funds on a single platform. There is no need for additional collaterals to raise money through the platform.