CGTMSE guarantee cover goes live on TReDS: 75% cover on invoice discounting where both buyer and seller are micro or small enterprises

What has gone live

The Ministry of Micro, Small and Medium Enterprises has rolled out credit guarantees on invoice discounting of Micro and Small Enterprises on the Trade Receivables Discounting System (TReDS), according to its release of 25 September 2026. The portal of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has been integrated with the TReDS ecosystem, and cover is now available on three platforms: M1xchange, RXIL and DTX (KredX).

The release links this to the Union Budget 2026–27, presented on 1 February 2026, in which a credit guarantee scheme for invoice discounting on TReDS was announced. Following it, the Ministry and CGTMSE launched a Special Provision that extends the guarantee to credit facilities on TReDS.

Main features of the Special Provision

How it works for financiers

The integration digitises the guarantee journey. A financier can check whether an invoice is eligible and apply for CGTMSE cover in real time on the platform. That triggers:

• automatic calculation of the guarantee fee, based on invoice value, financier type and tenor;
• debit of the fee; and
• automatic generation of the cover note and the corresponding invoice.

The release does not give the guarantee fee rates.

Why it matters

The Ministry says the cover is designed to mitigate credit risk for financiers, enable greater financing of eligible receivables of micro and small sellers, and support timely access to working capital at competitive rates. Dr. Rajneesh, Additional Secretary & Development Commissioner, who presided over the roll-out, said it “will also help in addressing the issue of delayed payments of MSEs”.

About TReDS

The release describes TReDS as an RBI-regulated electronic platform, operational since 2017, for financing and discounting the trade receivables of MSMEs due from corporate buyers, Government Departments and Public Sector Undertakings, through competitive bidding by multiple financiers. It puts invoice discounting on the platform at ₹3.5 lakh crore in FY 2025-26, up from ₹40,000 crore in FY 2021-22.

What micro and small enterprises should do

An MSE that sells to another MSE and waits for payment can ask its TReDS platform — M1xchange, RXIL or DTX (KredX) — whether the invoice qualifies for CGTMSE-backed discounting. The cover applies only where both sides of the invoice are micro or small enterprises, so the buyer’s status matters as much as the seller’s.