C2FO partners with SIDBI to boost liquidity for Indian MSMEs

By Gloria Mathias

C2FO, the on-demand working capital platform, has announced that the Small Industries Development Bank of India (SIDBI) is the latest financier to join C2treds.

This national funding platform enables the early payment of invoices to provide much-needed liquidity to India’s MSMEs.

C2treds operates under the Trade Receivables Discounting System (TReDS) initiative, facilitating the financing and discounting of MSMEs’ trade receivables through an online bidding process with multiple financiers. TReDS is regulated by the Reserve Bank of India (RBI) to support the growth and sustainability of the MSME sector in India.

SIDBI is the principal financial institution engaged in promoting, financing, and developing MSMEs in India. Through this strategic collaboration, C2treds aims to enhance liquidity for MSMEs at competitive interest rates typically reserved for larger enterprises.

“As the apex institution for the promotion and development of MSMEs, SIDBI is fully committed to increasing the flow of credit to MSMEs. TReDS has become an effective tool for the prompt realization of MSMEs’ receivables, and SIDBI is onboarded on all operational TreDS platforms,” said SIDBI Deputy Managing Director Prakash Kumar.

C2FO is a FinTech platform of scale in India, offering both Early Pay (dynamic discounting) and TReDS functionalities. This unique combination enhances liquidity and finance accessibility for MSMEs and enables large enterprises to create sustainable supply chains and achieve incremental savings.

“SIDBI joining the C2treds platform will significantly amplify our efforts to support the growth of MSMEs, which are our country’s employment engines,” said Basant Kaur, C2FO’s Country Head in India. By providing MSMEs with more access to the capital they need to grow, we are not only unlocking their potential but also driving the nation’s economic growth,” Kaur explained.

The MSME sector is crucial for India’s economic growth and sustainability, being the second-largest employer after agriculture. The Government of India (GOI) is intensifying its focus on the uptake of the TReDS platform. The recent union budget underscores this initiative by reducing the revenue threshold for mandatory onboarding of buyers on the TReDS platform from ₹500 crore to ₹250 crore. As a result, more MSME suppliers will find the liquidity they need at competitive rates through TReDS.