Kumud Das Mumbai

Therecently passed MSME Bill marks a major legislative shift aimed at correcting structural inefficiencies in India's small-business ecosystem. By formalizing stricter timelines for dues and introducing robust compliance mechanisms, the bill directly addresses the chronic issues of delayed payments and credit-choked supply chains.

Talking to Bizz Buzz, Pallavi Shrivastava, Co-Founder, Progcap, MSME Fintech says, “The biggest opportunity from these reforms is to make an MSME’s receivables more financeable. India has made significant progress in expanding access to credit; the next step is to make that credit work better around how small businesses actually operate. For an MSME, delayed payments can disrupt inventory cycles, supplier payments and the ability to take on the next order. Greater payment visibility through TReDS, stronger recovery mechanisms and better digital records can give lenders greater confidence in the underlying transaction and cash flows, rather than relying predominantly on the balance sheet.

This can move credit closer to where the business actually needs it. The larger shift is from financing payment delays to financing the underlying business activity. By making working capital more predictable, these reforms can enable MSMEs to use credit not merely to bridge disruptions, but to sustain operations, fulfil demand and unlock their next phase of growth.”

Sundeep Mohindru, Founder & Promoter, M1xchange said, “The passage of the MSME Development (Amendment) Bill marks an important step towards strengthening the payment infrastructure for India’s MSMEs. The move to mandate TReDS for CPSEs can significantly improve payment predictability for small businesses, while giving them access to timely, collateral-free working capital against approved invoices.”

With TReDS already witnessing substantial growth in invoice discounting, bringing more transactions onto the platform can deepen adoption and make timely payments a more embedded part of the MSME ecosystem. The focus on faster dispute resolution and stronger recovery mechanisms further complements this by addressing delayed payments from both the financing and enforcement sides.