KredX Gets RBI Nod To Launch TReDS Platform

Supply chain financing platform kredX said that it has received Reserve Bank of India’s (RBI) final approval to launch a trade receivables discounting system (TReDS) platform. 

In a statement, KredX said that the nod will pave the way for the commercial launch of its TReDS platform called DTX (domestic trade exchange). With this, the fintech startup claims to have become the fifth RBI-regulated TReDS platform in India. 

Besides KredX, existing TReDS operators include RXIL, M1xchange, Invoicemart, and C2treds. 

For the uninitiated, TReDS enables the discounting of trade receivables on an electronic platform for micro, small and medium enterprises (MSMEs) through multiple financiers. The system has been envisaged with fostering transparency, ensuring timely payments and improving liquidity for small businesses. 

The approval comes two months after the Centre issued a notification, mandating all businesses with more than INR 250 Cr turnover and all central public sector enterprises to register with TReDS. 

In a statement, the company said that the new DTX platform will leverage KredX’s technology infrastructure to offer a user-friendly experience for MSMEs. DTX will also offer a suite of financial solutions such as early payments, accounts payable and receivable financing as well as process automation. 

Commenting on the development, KredX cofounder and CEO Manish Kumar said, “Securing the TReDS license marks a transformative milestone in KredX’s journey, underscoring our commitment to empowering MSMEs with cutting-edge financial solutions. This achievement is not only a testament to our relentless focus on innovation but also aligns with the government’s vision to enhance transparency within the MSME’s payments and financing ecosystem”.

KredX also said that its domestic trade platform (DTX) will complement its global trade platform (GTX, licensed by IFSCA), and enable the company to offer a full-stack trade financing platform to MSMEs. 

“With proposed integrations with other public platforms, we expect TReDS transaction volumes to rise to around $50 Bn annually by 2026 from around $30 Bn annually as of today. There is a huge potential to broaden the scope of financiers and businesses on TReDS platforms adding to the potential impact by these platforms,” said KredX’s cofounder and executive director Anurag Jain.

Founded in 2015 by Kumar and Jain, KredX is a supply chain financing platform that offers a range of solutions such as cash flow management solutions, channel financing solutions for businesses as well as alternative debt investment solutions. 

The fintech startup has raised more than $32 Mn in funding to date and is backed by the likes of Tiger Global, Prime Venture Partners, Peak XV Partners, among others.