121 Finance, India’s first Digital NBFC-Factor, after the release of the Registration of Factors (Reserve Bank) Regulations, January 2022, has been onboarded on all three TReDS exchanges – M1xchange, RXIL, and Invoicemart.
Trade Receivables Discounting System (TReDS) is an initiative of the Reserve Bank of India (RBI) to support MSME payments from corporates. Factoring facilitates this with the primary intention to solve the problem of immediate cash requirements and eliminate credit risk.
Sundeep Mohindru, Promoter & CEO, M1xchange, welcomed 121 Finance saying, “We take immense pleasure in welcoming 121 Finance on M1xchange. As the newest NBFC Factor dedicated to digital lending, we see scope for synergetic growth between M1xchange and 121 Finance in digital financial inclusion of MSMEs. Look forward to a growing partnership!”
Mohindru added, the growth on TReDS in 2021-22 has almost reached the sum total of invoices of Rs 37,000 crore discounted between 2017-21. Once all qualifying companies are registered, this number will grow by 3x, given the cost for borrowing on TReDS is only about 4-6 percent.
“As a rising NBFC-Factor, we are working hard towards bringing in the awareness towards Factoring and the Government has made such an efficient, better, faster, and economical exchange in the form of TReDS. It is proving to be the best way to do Factoring. I strongly believe that our partnerships with M1xchange, Invoicemart and RXIL will prove beneficial to more and more MSMEs buying and selling their products and services”, says Dr Ravi Modani, Founder and CEO, of 121 Finance.
Prakash Sankaran, MD & CEO of Invoicemart, said “Amendment in the factoring regulation act has paved way for NBFCs as financiers on the TReDS platform and we are excited to start our journey of collaborating with NBFCs. We are happy to partner with 121 finance and look forward to their active participation on the platform in providing more liquidity to the MSMEs.”
