Ease of Doing Business for MSMEs: Business-to-government e-commerce portal Government e-Marketplace (GeM) on Monday announced partnership with Trade Receivables Discounting System (TReDS) platform operator Receivables Exchange of India Ltd (RXIL) to help government departments, public sector units, CPSEs etc. to finance their payments to MSME sellers of goods and services. RXIL — a joint venture between SIDBI and National Stock Exchange is among the three licensees for operating the TReDS platform. Invoicemart and M1Xchange are the other two operators.
The development comes days after the Finance Minister Nirmala Sitharaman proposed increasing the turnover of GeM to Rs 3 lakh crore. "GeM is moving ahead for creating a unified procurement system in the country for providing a single platform for procurement of goods, services and works. It offers a great opportunity for MSMEs," the minister had said. GeM currently has 3.25 lakh sellers listed out of which 70,783 sellers are micro and small enterprises contributing 52.50 of the total order value on the platform.
"For the proposed turnover (Rs 3 lakh crore) mandate, it is necessary to have the alternate financing mechanism in place. The integration between Trade Receivables Discounting System (TReDS) and GeM as suggested in the UK Sinha Committee report will allow PSUs/Govt. departments to do procurement without blocking their own funds while ensuring timely payments to MSMEs," said Ketan Gaikwad, CEO, RXIL.
Central PSUs, which have been mandated to buy at least 25 per cent of their total purchases from MSMEs, have procured 28.26 per cent from MSMEs, crossing the minimum threshold of 25 per cent, said a statement announcing the MoU signed between RXIL and GeM. The marketplace had launched Samvaad — an initiative in December 2019, to attract and onboard sellers to sell products online to government buyers and had covered states including Karnataka, Himachal Pradesh, Uttarakhand, and Andhra Pradesh.