Recent policy measures are reshaping the approach to credit extended to micro, small and medium enterprises (MSMEs). Instead of just focusing on the credit gap, delayed payments, or payment disputes, the government is building a framework that enables businesses to access liquidity against receivables.
The MSME Development (Amendment) Bill and measures for the Trade Receivables Discounting System (TReDS) — be it in Union Budget FY27, the Reserve Bank of India’s (RBI’s) revised directions, or the Ministry of MSME’s mandate requiring Central Public Sector Enterprises (CPSEs) to route invoice settlements through TReDS — point to a coordinated effort to improve working capital access for small businesses.
The Bill seeks to reinforce the mechanism for addressing delayed payments, improve enforcement of arbitral awards in favour of MSMEs and give states greater flexibility in constituting facilitation councils. While these changes strengthen dispute resolution, they also recognise that businesses need access to liquidity before payments are realised.
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