The Ministry of Micro, Small and Medium Enterprises has operationalized the provisioning of credit guarantees on invoice discounting for Micro and Small Enterprises (MSEs) on the Trade Receivables Discounting System (TReDS) platform, fulfilling a Union Budget 2026-27 announcement. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) portal is now integrated with three TReDS platforms: M1xchange, RXIL, and DTX (KredX). This integration digitizes the entire guarantee process for financiers, enabling them to check invoice eligibility, apply for cover, calculate fees, and generate cover notes in real-time.
The newly launched Special Provision extends a guarantee cover of 75% of the amount in default to mitigate credit risk for financiers. Eligibility is restricted to transactions where both the buyer and the seller are registered Micro or Small Enterprises. The scheme imposes maximum exposure limits on a revolving basis, capping it at ₹10 crore for an MSE buyer and ₹2 crore for an MSE seller. The objective is to enhance the financing of eligible receivables, provide timely access to working capital at competitive rates, and address the pervasive issue of delayed payments to MSEs.
TReDS is an RBI-regulated electronic platform that has seen tremendous growth, with invoice discounting volumes surging from ₹40,000 crore in FY 2021-22 to ₹3.5 lakh crore in FY 2025-26. The rollout was presided over by Dr. Rajneesh, Additional Secretary & Development Commissioner at the MSME Ministry, who emphasized that this step translates the Budget announcement into on-ground impact by strengthening the formal credit ecosystem for MSMEs.