MSME credit guarantee cover goes live for invoice financing on TReDS

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Updated: Sep 22, 2026 21:25 IST

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MSME credit guarantee cover goes live for invoice financing on TReDS

Representative Photo (Photo/@minmsme)

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New Delhi [India], September 22 (ANI): Micro and small businesses will now find it easier to get money against unpaid invoices, with the government's credit guarantee cover for financing through the Trade Receivables Discounting System (TReDS) becoming operational.

The mechanism provides guarantee support to banks and other financiers lending against eligible invoices raised by micro and small enterprises, reducing their lending risk and potentially widening access to working capital for smaller businesses.

The measure was announced in the Union Budget 2026-27 as part of efforts to improve credit availability for MSMEs and has now been operationalised through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

“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,” Rajneesh, Additional Secretary and Development Commissioner, Ministry of Micro, Small and Medium Enterprises, said.

TReDS allows MSMEs to raise funds against invoices that have been approved by their buyers. Instead of waiting for the buyer to make the payment, the MSME can get the invoice financed by a bank or other participating financier, helping it meet its working capital needs earlier.