M1xchange introduces credit guarantees for MSME financing

By Divya Shah

M1xchange has introduced CGTMSE-backed receivables financing on its TReDS platform, making it easier for MSMEs to secure working capital and helping financiers reduce lending risk through credit guarantee support. 

The company has completed the first transaction under the new framework, marking the extension of CGTMSE’s credit guarantee support to eligible MSME receivables financed through TReDS. 

The initiative aims to enhance access to working capital for micro and small enterprises by strengthening the financing proposition for receivables traded on TReDS platforms.  

Participating financiers can now access applicable CGTMSE guarantee cover for eligible receivables, helping mitigate credit risk and encourage greater participation in MSME financing. 

To enable the programme, CGTMSE has been integrated with M1xchange’s TReDS platform through APIs, digitising the end-to-end guarantee process.  

Financiers can verify invoice eligibility, apply for guarantee cover in real time, and receive automated calculations of guarantee fees based on invoice value, financier type and tenor. The platform also automates cover note generation and related documentation. 

Sundeep Mohindru, Founder and Promoter of M1xchange, said, “Integrating CGTMSE with M1xchange brings a significant change to the way credit risk can be managed in receivables financing.” 

He added that the initiative is expected to increase receivables financing access for micro and small enterprises across supply chains. 

The development follows the Union Budget 2026 announcement on extending credit guarantee support to TReDS transactions and aligns with the Reserve Bank of India’s updated TReDS framework, which allows financiers to avail guarantee cover from eligible government-established credit guarantee trusts. 

Manish Sinha, CEO of CGTMSE, said the integration would help simplify access to guarantee support and encourage greater financier participation in MSME receivables financing. 

The new framework will also support corporates and large buyers in scaling supplier financing programmes.