CRISIL SME tracker: TReDS will materially change MSME credit access

To address the funding crunch faced by micro, small and medium enterprises (MSMEs), the government on November 2, 2018, announced initiatives to improve credit access, as part of its support and outreach programme for the sector. This includes asking companies with a turnover of more than Rs 5 billion to mandatorily embrace the Trade Receivables e-Discounting System (TReDS). 

Bank credit to micro and small enterprises (MSEs), especially in manufacturing, has shown no signs of growth in the past two fiscal years, and actually declined for medium enterprises (source: RBI). 

For a long time now, there has been a structural need