RBI allows guarantee cover for TReDS financing in fresh directions

The Reserve Bank of India has enhanced credit access for MSMEs by allowing financiers on TReDS platforms to secure guarantee cover for financed receivables. This move aims to reduce credit risk, boost lender participation, and improve liquidity in the receivables financing ecosystem. The revised framework also streamlines onboarding, permits insurance cover, and strengthens the legal enforceability of TReDS transactions, fostering a more robust marketplace for working capital.

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