C2treds marks one year on TReDS: The new player in India's $133 billion factoring industry - Trade Treasury Payments

The Trade Receivables Discounting System (TReDS) is one of India’s most significant financial innovations, designed to address a critical challenge faced by Micro, Small, and Medium Enterprises (MSMEs), which is delayed payments from large corporate buyers. TReDS, launched by the Reserve Bank of India in 2018, enables MSMEs to convert their approved invoices into immediate working capital through a competitive bidding process among financial institutions.

TReDS processed a record $23.6 billion in transactions last financial year (April 2024 to March 2025), maintaining a staggering 134% compound annual growth rate since inception. Transaction volumes exploded tenfold between 2018 and 2022, with the past two financial years seeing a remarkable 424% surge in total value.

The system specifically targets the liquidity challenges faced by India’s 63 million MSMEs, which form the backbone of the country’s economy (contributes 30% to India’s GDP), yet traditionally struggle with cash flow constraints due to delayed payments. By enabling these businesses to access funds against their invoices within 48 hours rather than waiting the typical 90-120 days for payment, TReDS has become instrumental in strengthening India’s MSME sector.

MonetaGo and TReDS’s role in India’s factoring industry

TReDS’ success lies in MonetaGo’s Secure Financing system, which provides real-time validation to mitigate the risk of duplicate invoice financing and strengthen the integrity of trade finance workflows.

Since 2018, MonetaGo has been providing TReDS platforms with deduplication services, allowing the exchanges to identify whether an invoice has already been financed while preserving customer confidentiality.

MonetaGo began as a fintech focused on blockchain technology for financial services. In 2016, the company led a proof of concept with the RBI on the application of blockchain for trade finance and payments, which culminated in India’s first whitepaper on blockchain published by the RBI’s research institute.

In 2017, when the TReDS platforms discovered the problem of duplicate financing, MonetaGo was asked to build a blockchain-based solution. This was delivered in March 2018 and represented the world’s first day-to-day use of blockchain in receivables finance. The original solution was built on Hyperledger Fabric, later migrating to Corda DLT in 2021, marking the world’s first migration of an in-production system from one blockchain to another.

Most recently, in May 2024, MonetaGo completed another technological advancement, migrating from blockchain to confidential cloud computing without any disruption to service. This pivot addressed limitations of blockchain in scalability, latency, and cost, which had become increasingly acute with the exponential growth in transaction volumes.

The Secure Financing system uses digital fingerprinting created from hashing technology to deduplicate documents, offering real-time protection against fraud. The system also authenticates trade documents against trusted third-party sources, such as trade and maritime data aggregators and government agencies.

TReDS provides multiple advantages to MSMEs, including i) immediate access to working capital without additional collateral ii) competitive financing terms through a transparent bidding process. iii) reduced dependency on traditional bank financing iv) lower operational costs for receivables management, v) greater financial predictability for business planning.

Between 2018 and 2022, the volume of transactions on TReDS grew tenfold, with total transaction value across the 2023 and 2024 financial years increasing by a massive 424%. The system processes millions of invoices with an impressive 99.999% uptime.

At a broader level, India’s factoring industry was valued $133.3 billion last year and is likely to reach $212.2 billion by 2033 at a 5.3% CAGR, for which platforms like TReDS are very crucial, which showcases government initiatives in partnership with private players like MonetaGo.

C2treds becomes a new chapter in TReDS’ evolution

Against this backdrop, C2treds has completed its inaugural year of operations on India’s TReDS, marking a significant step in scaling secure receivables financing. C2treds, a wholly owned subsidiary of C2FO, the world’s leading on-demand working capital platform, received RBI approval to commence operations under the TReDS in April 2024.

“The first year success of C2treds is a testament to the principles we endeavoured to achieve in setting out to revolutionise the trade financing landscape in India by delivering an unparalleled experience on our platform, with a paramount focus on security,” said Neha Bahadur, GM & Head of Business at C2treds. “The critical layer of fraud prevention provided by MonetaGo’s technology enabled us to transact with confidence.”

C2treds joins established operators Receivables Exchange of India Ltd (RXIL), M1xchange, and Invoicemart on the TReDS network, and SBI Factors Limited, all leveraging MonetaGo’s Secure Financing solution to enhance financing security at scale.

Kalyan Basu, Managing Director India at MonetaGo, with over five decades of experience in the Indian banking and finance industry, congratulated the C2treds team on their first-year success in TReDS operations. He notes that the year-on-year growth of TReDS “is testament to the vital role fraud detection and prevention plays in supporting the Indian trade and receivables markets.”

Neil Shonhard, CEO of MonetaGo, adds: “The continued expansion and adoption of the MonetaGo system underlines the significant progress made in delivering on our commitments to reduce risks in trade finance through the detection and prevention of fraud.”.

Looking forward

Despite impressive growth, TReDS platforms currently serve only a fraction of eligible MSMEs. With India’s MSME credit gap estimated at approximately ₹30 trillion, the potential for further expansion is substantial.

As TReDS platforms like C2treds continue to innovate and partner with technology providers like MonetaGo, the system is set to play an increasingly vital role in addressing the working capital needs of India’s MSMEs, ultimately contributing to the broader goal of financial inclusion and economic growth.