KredX, a Bengaluru-based supply chain finance entity specializing in working capital optimization, has secured final regulatory approval from the Reserve Bank of India (RBI) to function as a Trade Receivables Discounting System (TReDS) platform. Under this authorization, KredX will operate its TReDS platform under the brand name DTX (Domestic Trade Exchange). With this designation, KredX becomes the fifth RBI-regulated TReDS platform, joining RXIL, M1xchange, Invoicemart, and C2treds. This approval consolidates KredX’s strategic positioning in India’s supply chain finance sector.
Understanding TReDS
TReDS is an RBI-regulated digital marketplace that facilitates trade receivables financing for micro, small, and medium enterprises (MSMEs) through a structured, multi-financier system. By allowing MSMEs to discount their invoices efficiently, TReDS mitigates liquidity constraints caused by extended payment cycles from large corporate buyers and public sector enterprises.
The platform’s objective is to standardize and formalize invoice discounting, fostering an ecosystem that enhances financial inclusion and credit accessibility for MSMEs. TReDS functions as a transparent and automated environment that minimizes operational inefficiencies, reduces transaction costs, and mitigates counterparty risks.
KredX’s DTX Initiative
DTX will introduce a suite of financial solutions aimed at enhancing the efficiency of receivables financing, including:
- Expedited working capital access through early payment solutions.
- Digitalized accounts receivable and payable financing to improve liquidity management.
- Process automation to reduce inefficiencies in trade financing transactions.
- System interoperability for seamless integration with enterprise financial workflows.
With the RBI’s regulatory endorsement, KredX intends to gradually onboard its existing client base onto the DTX platform, with an initial disbursal target of INR 200 crore by the end of the financial year and an expansion to USD 2 billion in the subsequent fiscal cycle. The company plans to scale DTX alongside its cross-border trade finance platform, GTX (Global Trade Exchange).
“We are executing a phased transition of our client base onto the TReDS framework, ensuring synergies with our GTX platform while optimizing financial accessibility,” stated Manish Kumar, CEO & Co-founder of KredX.
Market Growth and Regulatory Push
The timing of this approval aligns with recent regulatory mandates from the Government of India requiring all entities with an annual turnover exceeding INR 250 crore (previously INR 500 crore) and all central public sector enterprises (CPSEs) to register on TReDS. This policy shift is expected to drive substantial market adoption and compliance, presenting a significant growth opportunity for established platforms such as DTX.
“With these regulations in place, DTX is well-positioned to act as a compliance enabler while driving widespread adoption across the corporate finance landscape,” Kumar noted.
India’s invoice discounting market, underpinned by GST data, is estimated at approximately USD 200 billion annually. At present, the cumulative volume processed by all TReDS platforms stands at USD 2.5 billion per month, indicating considerable untapped market potential. As awareness and adoption increase, this figure is anticipated to rise, restructuring the domestic trade finance ecosystem.
KredX’s Expansion Strategy
Since its inception in 2015, KredX has facilitated financial transactions for over 70,000 MSMEs and 150 large corporations. The firm also operates under an International Financial Services Centre Authority (IFSCA) licence within GIFT City, providing global trade finance solutions through its GTX platform.
Looking ahead, KredX aims to integrate DTX with government-backed digital infrastructure, anticipating a growth trajectory that could drive TReDS transaction volumes to USD 50 billion annually by 2026, up from the current USD 30 billion. To achieve this, the company is leveraging advanced technologies, including artificial intelligence, machine learning, and big data analytics, to refine credit risk assessments and enhance transaction security.
Financial Positioning and Industry Impact
KredX has successfully secured over USD 33 million in funding from leading investors, including Tiger Global, Peak XV Partners, and Prime Venture Partners. With a strong capital base and a robust technological framework, the company is well-equipped to capitalize on the expanding demand for structured trade finance solutions in India.
Conclusion
With RBI’s regulatory approval, KredX is set to play a transformative role in India’s trade finance ecosystem. By leveraging cutting-edge technology, aligning with compliance directives, and expanding its market reach, DTX is poised to enhance financial transparency, liquidity access, and operational efficiency for MSMEs. As fintech-driven trade finance solutions gain traction, KredX is positioned to drive the next phase of innovation in India’s supply chain finance sector.
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