Incentives for MSMEs to boost factoring mkt, ease recovery of receivables

The package makes it a must for large corporate buyers to register on TReDS system, shifting the risk of paying the banks from the MSME to the corporate customer

A factoring market of Rs 35 billion, apart from a huge OTC bill discounting market, will get a boost from Prime Minister Narendra Modi’s announcement of a 12-point incentive package for micro, small and medium enterprises (MSMEs) last Friday.

The major incentives include interest rate subvention, which helps making credit facilities cheaper, but, more importantly, when these units sell goods, the new package makes the recovery of receivables, especially from large buyers, smooth. Modi had said “all companies with a turnover of more