MSME demand for TReDS financing likely to increase

UNCERTAINTY LOOMS

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ESCALATING TENSIONS IN West Asia are likely to increase the demand for working capital financing through the Trade Receivables Discounting System (TReDS), as export-oriented micro, small and medium enterprises (MSMEs) grapple with shipment delays, higher freight costs and rising insurance premiums.

“During periods of heightened uncertainty and fluctuating input costs, corporates and MSMEs tend to prefer regulated, bank-backed mechanisms like TReDS to access liquidity and maintain stable supplier relationships,” Ketan Gaikwad, managing director and CEO of Receivables Exchange of India (RXIL) said, adding that a similar pattern was observed during the Covid-19 pandemic.