Jana Small Finance Bank partners with TReDS platforms

Jana Small Finance Bank Friday announced its partnership with all the three existing TReDS platforms, including M1xchange, RXIL, and A.TReDS. 

The Bank in its issued statement said, “These partnership with Jana Small Finance Bank will provide buyers and suppliers registered on all the TReDS platforms with a variety of options to secure funds by discounting invoices after the sale.”

The Trade Receivables Discounting System (TReDS) has been set up by RBI, to resolve the credit challenges faced by the MSME suppliers by enabling discounting of their invoices and bills of exchange. 

TReDS ensures timely payments to MSMEs that access credit by posting their trade receivables on the system and getting them financed at a competitive rate through an auction mechanism where multiple financiers can bid on invoices accepted by PSUs/corporate buyers. Consequently, not only does this give MSMEs greater access to liquidity but it also puts greater discipline on corporates to pay their dues on time.

“With the economy recovering after the COVID pandemic, Jana Small Finance Bank has been seeking to bolster its goal of building a robust and diverse MSME portfolio by stepping up its focus on supply chain financing. This partnership with all the three TReDS platforms is inclusive and provides access to a broad range of MSME loan-seekers,” the statement said.

Speaking on the partnership, Sumit Aggarwal, Head of MSE, Supply Chain & Financial Institutions of Jana Small Finance Bank said, “MSMEs contribute 30% of India’s GDP, their growth depends on the availability of convenient, collateral-free funding solutions to finance average outstanding receivables of Rs 500,000 crores per year, due to the time lapse between raising an invoice and receiving payment.”

“By partnering with all available TReDS exchanges, we intend to become the go-to solution provider of supply chain finance to MSMEs that wish to unlock working capital without having to post collaterals or go through lengthy loan application processes,” Aggarwal added.