RBI panel report suggests big role for NBFCs in developing MSME sector

However, if more NBFCs are allowed in the factoring platform, MSMEs will immediately witness ready buyers, and their debtor delay and working capital cycle will improve vastly

A Reserve Bank of India (RBI) committee report on micro, small and medium enterprises (MSMEs), released on Tuesday, had a few crucial recommendations which can make non-banking financial companies (NBFCs) assume a bigger role in developing the sector by introducing more finance companies as ready lenders to the segment.
 
To start with, the committee suggested that more NBFCs be onboarded on the trade receivable platform — TReDS — of the Reserve Bank of India (RBI). The TReDS platform mitigates risk arising out of non-payment of receivables of MSMEs that supply to a large buyer or are a part of