Which of the following statements about M1xchange's role in Micro, Small & Medium Enterprises (MSMEs) financing is/are correct ? 1. M1xchange provides collateral based loans to MSMEs. 2. M1xchange facilitates discounting of invoices and Bills of Exchange for MSMEs. 3. M1xchange functions as a credit rating agency for MSMEs. Select the answer using the code given below :
A
1, 2 and 3
B
2 only
Correct answer
C
2 and 3 only
D
1 only
Explanation
M1xchange is an RBI-licensed Trade Receivables Discounting System (TReDS) platform. MSMEs upload invoices and bills of exchange raised on large buyers, and banks and NBFCs bid to discount them, giving MSMEs quick, collateral-free working capital. M1xchange itself neither lends against collateral nor rates credit, so only statement 2 is correct.
Banking & Financial InstitutionsMSME finance: TReDSM1xchangeTReDSInvoice discountingMSMEBills of exchange