The problem
Small suppliers in India were owed an estimated ₹7.34 lakh crore in overdue payments as of March 2024, according to the GAME–FISME–C2FO Delayed Payments Report 3.0. The figure was ₹10.7 lakh crore in 2022. Public sector undertakings account for close to 40% of it, and delays often run past 90 days.
On paper the supplier is protected. A buyer that does not pay an MSME vendor within 45 days cannot claim that expense as a tax deduction. In practice the small firm ends up financing the large one, because chasing the money risks losing the customer.
Suppliers whose buyers are on a TReDS platform can sell the invoice at a discount and get paid. Most are not in that position. Their choices are to borrow, to wait, or to file a case on the government's MSME Samadhaan portal.
- Who has this problem
- Micro, small and medium enterprises that supply larger companies and public sector undertakings.
- Languages needed
- Hindi and regional languages
Where the demand comes from
What people do today
- The workaround
- They borrow to cover the gap, offer discounts for early payment, or file a case on the government's MSME Samadhaan portal.
- Why that fails
- The buyer has the bargaining power. Chasing payment risks losing the customer, and formal complaints are slow.
How others solved it3
Products and services that work on a similar problem, in India and elsewhere.
- TReDS platforms (RXIL, M1xchange, Invoicemart)India
RBI-licensed exchanges where MSMEs sell their invoices to financiers at a discount.
- MSME SamadhaanIndia
Government portal for filing delayed payment cases.
- C2FOUSA
Lets suppliers get paid early by their buyers in return for a discount.
Read and watch1
Where the facts on this page come from.
- ArticleDelayed Payments Report 3.0 highlights MSME finance progress
SMEStreet