M1xchange has demonstrated 100% year-on-year growth
FinTech BizNews Service
Mumbai, 18 November 2024: M1xchange, India's leading invoice discounting platform, achieved a total throughput of more than 32,000 crore in the first half of FY24-25, demonstrating 100% year-on-year growth. This highlights the platform's significant role in reshaping alternative financing for small businesses, helping bridge the credit gap and driving MSME growth and sustainability.
A Crisil report reveals that India’s MSME sector faces a massive credit gap of ₹20-25 lakh crore. Of the 64 million MSMEs, only about 20% have access to formal credit. To improve credit access and drive MSME growth, the government has introduced key initiatives this year. In alignment with these efforts, M1xchange is the first to expand the scope of TReDS with its innovative Small-to-Small (S2S) financing initiative. This initiative has successfully brought tier 2 and tier 3 MSMEs into the formal credit system, enabling them to benefit from early payments at competitive rates.
Invoice discounting via TReDS experienced a significant upsurge in 2024 driven by adoption among MSMEs, corporates, and banks and regulatory support. Sundeep Mohindru, Promoter & Director, M1xchange, said, "We are excited to have achieved such substantial growth in a short period. The increasing acceptance and recognition by the government of our platform highlights the value we are creating for both MSMEs, corporates and Financiers along with supportive government initiatives, has propelled us to these new heights. Our focus remains on providing easy access to working capital at competitive rates, and this expansion reflects the trust businesses place in us. We’re confident this momentum will continue, helping MSMEs thrive in the fast-evolving market.”
In the first half of FY24-25 alone, M1xchange onboarded more than 200 new corporates and 10,000 MSMEs. The platform’s transaction volume grew consistently, with M1xchange discounting invoices worth ₹43,000 crore in FY24, a sharp rise from ₹23,100 crore in FY23. This growth is a testament to the increasing recognition of TReDS as an efficient and cost-effective solution for MSME financing.
The cost of financing on M1xchange has also become a key selling point for businesses. By reducing financing costs by 5-8%, MSMEs have been able to lower their business expenses, and these savings are passed on to corporate customers. Additionally, the platform’s risk-mitigated framework, which has minimal defaults, has encouraged banks to offer financing to BBB-rated corporates, enabling broader access for MSMEs.
The strong momentum for M1xchange is also a reflection of India’s growing economy, particularly in key sectors such as Infrastructure, Electricals/Electronics, Auto & Ancillaries, Textiles, Energy, and Agro. These industries account for over 60% of M1xchange’s total throughput, further validating the platform’s significance across multiple sectors. This growth story is further bolstered by its partnerships with state governments, including Andhra Pradesh, Maharashtra, Haryana, Goa, Madhya Pradesh, and Tamil Nadu. These collaborations have allowed M1xchange to offer liquidity to state MSMEs while ensuring timely payments at competitive rates, reinforcing its commitment to empowering small businesses nationwide.
Further the adoption of invoice discounting via TReDS has been fuelled by government support and regulatory reforms aimed at addressing the credit gap within the MSME sector. Recent measures by the government, such as reducing the turnover threshold for mandatory TReDS onboarding from ₹500 crore to ₹250 crore, have made the platform more attractive to banks and NBFCs. Furthermore, the government has raised priority sector lending (PSL) targets to ₹27.5 lakh crore for FY25, ensuring greater access to credit for MSMEs. These steps have contributed significantly to the growing traction on the TReDS platform.
