New Delhi, Jun 26 (KNN) Tier-II, Tier-III and smaller business centres are driving formal receivables financing in India, accounting for 71 percent of MSMEs on the M1xchange TReDS platform and 67 percent of transaction volume, according to its first Working Capital Pulse Report.
The findings underscore the growing reach of digital financing and formal credit access beyond metro markets.
M1xchange Expands Reach Across Emerging Business Centres
According to M1xchange, its network expanded to more than 9,000 pin codes across over 2,500 cities in FY26, with nearly 2,000 new pin codes added during the year, reported the Economic Times.
Emerging business centres such as Kollam, Malappuram, Kannur, Thrissur, Jammu, Daman, Aizawl, Kargil and Baramulla have increasingly become part of the formal financing ecosystem.
TReDS Ecosystem Crosses Rs 4 Lakh Crore in Annual Financing
The report noted that the broader TReDS ecosystem currently facilitates invoice financing worth over Rs 4 lakh crore annually.
Average financing tenors have increased from 71 days to 87 days over recent years, indicating greater ecosystem maturity and growing confidence among financiers.
MSMEs Benefit from Faster Access to Working Capital
MSMEs continue to benefit from faster access to working capital, with payments typically received within 24 hours, while buyers gain flexibility through extended credit periods.
The report noted that over 80 percent of MSMEs undertake repeat transactions, and 78 percent remain active across multiple months, indicating strong platform engagement and retention.
Sundeep Mohindru, Founder, M1xchange, said the increasing adoption of digital receivables financing is helping address long-standing
payment delays while creating a more inclusive and efficient credit ecosystem for MSMEs.
Participation from Buyers and Financiers Sees Strong Growth
The report also highlighted strong growth in platform participation, with the number of financiers rising from 13 in FY18 to 78 currently and active buyers increasing from 26 to over 13,000.
More than 7,000 buyers were added in FY26 alone, aided by innovations such as Supplier-to-Supplier (S2S) financing, which enables MSMEs to act as buyers and access payable discounting solutions.
Corporate Adoption of TReDS Continues to Rise
These innovations have deepened formal financing across supply chains, with average transaction volume per buyer rising from Rs 12.12 crore in FY18 to Rs 100.45 crore in FY26.
Financing has also become more efficient, with first bids typically received within four hours and automated systems generating bids in as little as 10 seconds.
Infrastructure, Manufacturing and Agriculture Lead Financing Demand
Infrastructure, electricals and electronics, steel and metals, auto and auto ancillaries, and agriculture led invoice financing activity, while sectors such as textiles, jewellery, FMCG, trading, ceramics and tiles showed seasonal financing trends.
The report highlights the growing role of digital receivables financing in improving MSME access to working capital and advancing financial inclusion beyond major urban centres.
(KNN Bureau)
