Supply chain platform KredX secures RBI's approval to launch TReDS platform

Supply chain platform KredX on Thursday received final approval from the Reserve Bank of India (RBI) to launch its Trade Receivables Discounting System (TReDS) platform under the brand name DTX (Domestic Trade Exchange).

 

KredX’s DTX is the fifth platform to receive the banking regulator’s nod to operate TReDS. With the latest approval, the company plans to gradually move its clients onto the platform, targeting $2 billion in disbursements by the end of the next financial year.

 

“We will be moving a big part of our clients slowly and gradually onto the TReDS platform. The focus is to scale it along with our cross-border GTX platform. We will be working in parallel to ensure we migrate as many clients as possible to the latest one,” said Manish Kumar, chief executive officer and co-founder, KredX.

 

The Bengaluru-based company has processed transactions for over 70,000 micro, small and medium enterprises (MSMEs) and 150 large corporates to date.

 

TReDS is an electronic platform for facilitating the financing and discounting of trade receivables of MSMEs through multiple financiers.

 

These receivables can be due from corporates and other buyers, including government departments and public sector undertakings (PSUs), according to the Reserve Bank of India.

 

“If you look at the total addressable market based on the GST numbers that we see on a monthly basis, the bill discounting market is close to $200 billion in India on an annualised basis. Even if you combine all the platforms, they are processing close to $2.5 billion a month. Hence, there’s a massive opportunity,” said Anurag Jain, co-founder and executive director, KredX.

 

The banking regulator issues in-principle approval to entities before granting final nod to firms to operate on TReDS.

 

Following in-principle approval, firms are required to generate a system audit report. Companies must also comply with Know Your Customer (KYC), anti-money laundering (AML), and other reporting norms.

 

KredX was founded in 2015.

 

The company has raised $33 million across three funding rounds, according to data from market intelligence platform Tracxn.