Kolkata: Small Industries Development Bank of India (SIDBI) has announced to set up ‘Swavalamban Crisis Responsive Fund’ to support free onboarding of MSMEs on Trade Receivables Discounting System (TReDS).
The government has been taking several steps to strengthen the MSME ecosystem. The Swavalamban Crisis Responsive Fund aims to implement several Government of India initiatives towards quick response to COVID-19 fallout.
Mohammad Mustafa, IAS, Chairman and Managing Director of SIDBI said, “Swavalamban Crisis Responsive Fund (SCRF) aims at offering relief to the MSMEs during these challenging times. We are hopeful that MSMEs shall maximize this opportunity to onboard TReDS, thus getting much needed breather from squeezed/severely crunched cash flow.”
TReDS is an electronic platform where receivables of MSMEs drawn against buyers (large corporates, Public Sector Undertakings, Government Departments, etc.) are financed through multiple financiers at competitive rates through an auction mechanism. In order to induce MSMEs to increasingly join on these platforms and leverage the gains, discussions were conducted with these platforms. They have all proactively come forward to join the national responsive initiative to extend free onboarding access to MSMEs till September 2020. The fund would be utilized to partially offset the cost of joining/registration fee on the TReDS platform and support the TReDS Companies to ensure free onboarding charges for MSMEs.
SIDBI is also spearheading a differentiated cluster outreach program in clusters of 10 cities where through 5 partner institutions (Fintech, Non-Banking Financial Companies-Microfinance Institutions or NBFC-MFIs) it shall be creating awareness on TReDS, Government e-Marketplace etc. and maximize onboarding of MSMEs.
