Quote on Union Budget 2026 by Kiran Chonkar, Partner - Corporate Finance & Investment Banking, Deal Advisory, BDO India
Below the Quote on Union Budget 2026 by Kiran Chonkar, Partner - Corporate Finance & Investment Banking, Deal Advisory, BDO India
"The identification and nurturing of Champion SMEs, along with providing access to them through a new ?10,000 crore SME fund, shall provide the right capital to high-potential SME businesses, to scale up into larger manufacturing units, thus resulting in enhanced manufacturing capacities and employment creation.
TReDS is proposed to be the mandatory trade settlement platform going forward for purchases made by Central Public Sector Enterprises. This in conjunction with the proposed credit guarantee support mechanism through the CGTMSE shall lead to enhanced participation of Banks and NBFCs for invoice discounting on account of the credit risk mitigation. We can also expect that MSMEs with lower credit ratings to get access to invoice discounting facility at more competitive interest rates. This will result in improved liquidity for MSMEs.
The classification of TReDS receivables as “Asset-Backed Securities” is an interesting development. While the short-term impact may be fairly limited, in the medium and long term, one can expect development of a secondary market for TReDS receivables with larger institutional participation. Financers will be able to free up and churn their capital by selling off portfolios of invoices."
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