The top invoice discounting platform in India, M1xchange, saw 100% year-over-year growth in the first half of FY24–25, with a total throughput of over 32,000 crore. This demonstrates the platform’s important contribution to changing small company alternative financing, closing the credit gap, and promoting the expansion and sustainability of MSME.
According to a Crisil research, there is a significant credit gap of ₹20–25 lakh crore in India’s MSME sector. Just 20% of the 64 million MSMEs have formal financing available to them. This year, the government has launched important programs to increase loan availability and spur MSME expansion. With its creative Small-to-Small (S2S) financing program, M1xchange is the first to broaden the reach of TReDS in support of these initiatives. By successfully integrating tier 2 and tier 3 MSMEs into the official credit system, this effort has allowed them to take advantage of competitive rates for early payments.
In 2024, there was a notable increase in invoice discounting through TReDS, fueled by regulatory assistance as well as adoption by MSMEs, corporations, and banks. M1xchange’s promoter and director, Sundeep Mohindru, stated: “We are thrilled to have accomplished such significant development in such a short time. Together with encouraging government measures, our platform’s growing official approval and recognition underscores the value we are generating for MSMEs, corporations, and financiers, which has helped us reach these new heights. Our goal is still to make working capital easily accessible at competitive rates, and this expansion shows how much businesses trust us. We have little doubt that this trend will continue, enabling MSMEs to prosper in the rapidly changing market.
M1xchange onboarded 10,000 MSMEs and more than 200 new corporates in the first half of FY24–25 alone. With M1xchange discounting invoices worth ₹43,000 crore in FY24—a significant increase from ₹23,100 crore in FY23—the platform’s transaction volume increased steadily. This expansion demonstrates the growing acceptance of TReDS as a successful and affordable MSME financing option.
Another important selling feature for companies is the cost of financing on M1xchange. MSMEs have been able to cut their business expenses by 5–8% by lowering financing costs, and they pass these savings along to corporate clients. Furthermore, banks have been attracted to provide funding to BBB-rated corporates due to the platform’s risk-mitigated structure, which has a low default rate, allowing MSMEs to have wider access.
The strong momentum for M1xchange is also a reflection of India’s growing economy, particularly in key sectors such as Infrastructure, Electricals/Electronics, Auto & Ancillaries, Textiles, Energy, and Agro. These industries account for over 60% of M1xchange’s total throughput, further validating the platform’s significance across multiple sectors. This growth story is further bolstered by its partnerships with state governments, including Andhra Pradesh, Maharashtra, Haryana, Goa, Madhya Pradesh, and Tamil Nadu. These collaborations have allowed M1xchange to offer liquidity to state MSMEs while ensuring timely payments at competitive rates, reinforcing its commitment to empowering small businesses nationwide.
Further the adoption of invoice discounting via TReDS has been fuelled by government support and regulatory reforms aimed at addressing the credit gap within the MSME sector. Recent measures by the government, such as reducing the turnover threshold for mandatory TReDS onboarding from ₹500 crore to ₹250 crore, have made the platform more attractive to banks and NBFCs. Furthermore, the government has raised priority sector lending (PSL) targets to ₹27.5 lakh crore for FY25, ensuring greater access to credit for MSMEs. These steps have contributed significantly to the growing traction on the TReDS platform.
