M1xchange goes live with CGTMSE guarantee cover for MSME receivables financing

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), set up to facilitate credit flow to eligible Micro and Small Enterprises through credit guarantee support, is extending its guaranteed framework to receivables financing through TReDS.

Collaboration across the ecosystem: The Ministry of Micro, Small and Medium Enterprises (MoMSME), CGTMSE and M1xchange have collaborated to operationalise the guaranteed mechanism for eligible MSE receivables financed through TReDS.

First CGTMSE-backed TReDS transaction: M1xchange has completed the first transaction on its TReDS platform backed by CGTMSE guarantee cover, bringing the benefits of credit guarantee support into the TReDS financing framework.


Wider liquidity access for MSMEs: By strengthening the financing proposition for eligible receivables on TReDS, the initiative can support greater access to timely working capital for MSME sellers.

Added risk support for financiers: The mechanism provides participating financiers with access to applicable CGTMSE guarantee support for eligible receivables, supporting greater participation in MSE financing.

CGTMSE is integrated with M1xchange’s TReDS platform via APIs, digitizing the entire guaranteed journey for financiers. Financiers can check invoice eligibility and apply for CGTMSE cover in real time on the platform. This triggers automatic guarantee fee calculation based on invoice value, financier type and tenor, fee debit on a T+1 basis, and automatic generation of the cover note and corresponding invoice.

Sundeep Mohindru, Founder & Promoter, M1xchange, “Integrating CGTMSE with M1xchange brings a significant change to the way credit risk can be managed in receivables financing. By making the guarantee journey digital and transaction-level, we are enabling financiers to assess and access eligible guarantee cover seamlessly. This will enable flow of receivable financing to deep tiers of Micro and Small enterprises. We see it as a significant step in strengthening India's MSME supply chains at a time when they need it most.”

The development follows the Union Budget 2026 announcement on credit guarantee support for TReDS transactions and the RBI’s 2026 TReDS framework, which permits financiers to avail guarantee cover from eligible Government-established credit guarantee trusts.

Manish Sinha, Chief Executive Officer, CGTMSE, said, “TReDS has played a significant role in improving working capital access for MSMEs. The integration of CGTMSE’s guarantee mechanism with a digital TReDS platform can make the process more seamless for financiers while supporting greater participation in eligible MSME receivables financing. We see this as an important step towards strengthening the credit ecosystem for the MSME sector.”

Rajneesh, IAS, Additional Secretary & Development Commissioner, Ministry of Micro, Small and Medium Enterprises (MoMSME), said, “Extending CGTMSE-backed guarantee cover to TReDS receivables is an important step in translating the Union Budget’s MSME support measures into on-ground impact, further strengthening the financing ecosystem for MSMEs by improving access to timely and formal sources of credit.”

For corporates and large buyers, the digital infrastructure can support supplier financing programmes at scale. This will benefit M1xchange’s ecosystem, comprising 81+ banks, 15,000+ corporates and 1,10,000+ MSMEs, by enabling greater access to guarantee-backed receivables financing.