Gujarat Govt and M1xchange partner to enhance MSME financing

By Gloria Methri

The Government of Gujarat has entered into a memorandum of understanding (MoU) with M1xchange, a Trade Receivables Discounting System (TReDS) platform in India, along with its subsidiaries Mynd Fintech and M1 NXT. The partnership seeks to improve access to working capital for micro, small, and medium enterprises (MSMEs) in Gujarat that supply state government departments, public sector undertakings (PSUs), and private enterprises by enabling easy, collateral-free financing through digital invoice discounting.

Gujarat contributes approximately 8% to India’s gross domestic product and has over 2.37 million MSMEs registered on the Udyam platform. It is recognised as one of the most industrially advanced states in the country. Additionally, the Gujarat government has mandated that 25% of annual procurement should be sourced from micro and small enterprises (MSEs), reflecting the sector’s importance to the state’s economy. This partnership aims to support MSMEs’ financial health, promoting growth and continuity in business operations.

Through this strategic alliance, M1xchange and the Government of Gujarat aim to strengthen the MSME ecosystem by facilitating early payments for MSMEs engaged with government departments, PSUs, and private companies in Gujarat at competitive rates. The collaboration will also include a broad awareness campaign across key industrial clusters to onboard eligible MSMEs and inform them about the benefits of digital invoice discounting.

Amit Sachdev, Co-founder and COO of M1xchange, said, “We are extremely grateful to have the opportunity to work with the Government of Gujarat to empower and enhance business opportunities for MSMEs in the state. This partnership will play a big role in addressing credit gaps faced by the MSME sector, giving them an opportunity to avail of receivable financing through TReDS easily. Our joint efforts aim to ensure that MSMEs receive timely payments, thereby improving their cash flow and fostering growth. Together, we are committed to reform the financial landscape for MSMEs in the state.”

Commenting on the partnership, Sandip Sagale, IAS, Commissioner of MSMEs, Government of Gujarat, said, “MSMEs form the backbone of Gujarat’s economy, employing over 10 million people and contributing significantly to the state’s industrial growth. With Gujarat accounting for nearly 8% of India’s GDP, we must strengthen the financial ecosystem supporting our MSMEs. This partnership marks a significant step in enhancing access to formal credit for MSMEs working with the Government of Gujarat and within the state by leveraging digital invoice discounting mechanisms through TReDS platforms. It will enable faster, easier, and collateral-free access to working capital, ensuring timely payments, improved cash flow, and reduced reliance on informal credit channels. We are confident that this initiative will empower our MSMEs, drive business sustainability, and further accelerate Gujarat’s economic momentum.”

To date, M1xchange has facilitated invoice discounting worth over INR 1.75 trillion. It has signed MoUs with several other state governments, including Maharashtra, Haryana, Goa, Madhya Pradesh, and Tamil Nadu, to enhance MSME liquidity and ensure timely payments at competitive rates.