Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on February 1 and announced significant measures for small businesses. She stated that the Government e-Marketplace (GeM) will now be linked with the Trade Receivables Discounting System (TReDS). This integration aims to share official procurement data with lenders to help MSMEs get credit faster based on their government orders.
What are the major changes for MSME payments?
The government has made it mandatory for all Central Public Sector Enterprises (CPSEs) to use the TReDS platform for settling payments with MSMEs. This step ensures that small business owners receive their dues on time without long waiting periods. The Finance Minister also mentioned that over Rs 7 lakh crore has already been provided to the MSME sector through various liquidity measures. This new rule sets a benchmark for the private sector to follow similar payment standards to help small traders.
How will the new credit guarantee help businesses?
To support invoice discounting on the TReDS platform, a special credit guarantee scheme will be launched through CGTMSE. This provides safety to banks and financial institutions when they discount bills for small businesses. Furthermore, TReDS receivables will be introduced as asset-backed securities to create a secondary market. These steps will increase cash flow and make financing easier for small enterprises across the country.
