M1xchange fuels Karnataka’s growth with swift, collateral-free financing solutions
Bangalore (Karnataka) [India], November 25: M1xchange, India’s leading invoice discounting platform for MSMEs, foresees a surge in demand for trade finance solutions in Karnataka as the state drives toward becoming a $1 trillion economy by 2030 under its new 2025-2030 industrial policy. Positioned to become a manufacturing powerhouse with significant growth across sectors such as FMCG, automotive, energy, and infrastructure, Karnataka’s MSMEs are crucial to this vision, contributing roughly 27% to the state’s GDP.
In the past three years, M1xchange’s transaction value has tripled in southern India, with southern states now accounting for 25% of the total MSME onboarded and the throughput value. Key sectors such as textiles and agriculture are contributing significantly, creating robust opportunities for MSMEs. In fact, Bengaluru alone contributes around 10% of M1xchange’s total MSME count and transaction value.
Currently Karnataka has 35,38,643 Udyam registered MSMEs. The government of Karnataka has also launched significant initiatives such as “Beyond Bengaluru” program and the New Industrial Policy 2025-30 to enhance support for MSMEs through financial incentives, improved infrastructure, and expanded skill development programs.
“As Karnataka pursues its goal of becoming a $1 trillion economy, we are witnessing rapid demand for working capital financing across the state and especially in Bengaluru.M1xchange is well-positioned to support this transformation by providing MSMEs with efficient, collateral-free financing solutions that address their critical cash flow needs. With our innovative offerings like ‘M1xchange Small-Small,’ and the strong support of government initiatives, we are committed to empowering MSMEs and strengthening the local economy. Together, we can reshape the MSME landscape, driving growth and unlocking the full potential of Karnataka’s industrial vision,” said Sundeep Mohindru, Promoter & Director, M1xchange.
With INR 1.3 lakh crore in invoice discounting and over 25 lakh invoices processed, M1xchange is on track to reach INR 72,000 crore in throughput value by March 2025, up from INR 43,100 crore in FY24. M1xchange is the first to expand the scope of TReDS with its innovative Small-to-Small financing initiative, tested in RBI’s Third Cohort under the Regulatory Sandbox (RS). This initiative has successfully brought tier 2 and tier 3 MSMEs into the formal credit system, enabling them to benefit from early payments at competitive rates.
M1xchange is a TReDS (Trade Receivables Discounting) exchange that started in April 2017. M1xchange facilitates the financing of trade receivables of MSMEs from corporate buyers through ‘factoring’ or ‘invoice discounting’ by financiers (Banks and NBFC). In a short span of time, M1xchange has onboarded 60+ Banks, 1,700+ corporates, and 40,000+ MSMEs and has facilitated discounting of invoices of more than Rs 130,000 Crores. Transactions on the TReDS platform happen digitally and start when the MSME Supplier of Goods & Services raises the invoice, and the Buyer validates the same. This permits the financiers (Banks/ NBFCs) to bid against the verified and approved invoice. Once the supplier accepts the bid, the payment is processed in 24 hrs. and credited to the MSMEs bank account. Through this platform, M1xchange promises MSMEs greater access to finance” at competitive rates and without providing any collateral. Further, the financing is without recourse. MSMEs pass on the risk of receivables to the financiers (NBFCs/Banks) by selling their receivables.
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