Now NBFCs Can Offer MSME Loans Using TReDS Platform

As of now, there were restrictions on NBFCs regarding MSME Loans. Only select NBFCs were able to offer MSME Loans. This revision of guidelines is expected to bring much-needed reform in the MSME credit space.

Now NBFCs Can Offer MSME Loans Using TReDS Platform

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A long-pending demand from the MSME sector was addressed yesterday as the Union Cabinet allowed all non-banking financial companies to provide discount loans to MSMEs against dues from government departments, through the TReDS platform. According to experts, this is expected to bring a much-needed change among MSME Sector with respect to the MSME Credit access.

So far only a selected NBFCs and banks were on the platform and could give the discount loans to MSMEs.

Briefing the media on the cabinet decisions, Union Information and Broadcasting Minister Prakash Javadekar said that the decision has been taken to improve the liquidity flow to the MSMEs.

with this news announcement, SMEStreet is reaching out to the NBFCs and MSME sector seeking their feedback on this news development.

He noted that MSMEs get their dues on the bills generated from government departments and agencies after 90 days which creates liquidity issues and the latest move has been aimed towards easing the liquidity flow during such delay.

Cash flow and liquidity have been a major concern for micro, small and medium enterprises amid the pandemic and the latest decision is one among the series of the measures taken by the government to ease the cash flow.

Earlier in the day, the Union Government also launched the Credit Guarantee Scheme for Subordinate Debt for MSMEs, thereby operationalising the Rs 20,000 crore distressed assets fund.

The MSME Ministry issued guidelines for the scheme which was announced under the Aatmanirbhar Bharat economic package.

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