Caught between a slowing economy and sticky rate of job creation, the Union Government has put focus on rejuvenating the MSME (micro, small and medium enterprises) sector in kick starting the sagging growth rate. In one such measure the government will soon amend the Factoring Regulation Act 2011.
Two teething troubles which MSMEs face are timely availability of credit and collecting payments on time. Of the 6.34 crore (63.4m) MSMEs in the country, only about 8% are served by formal credit channels. In order to support MSMEs, which are the lifeline of our economy, the Government has put emphasis on use of the Trade Receivables Discounting System Platform (TReDS).
