How this SIDBI-backed platform leverages digital tech to streamline MSME financing

The Receivables Exchange of India Limited (RXIL) is a joint venture promoted by the financial institution  Small Industries Development Bank of India (SIDBI) and the National Stock Exchange (NSE). RXIL was established in 2016 to address the issue of delayed payments for Micro, Small, and Medium Enterprises (MSMEs) in India.

RXIL operates a TReDS (Trade Receivables Discounting System) platform under the Reserve Bank of India (RBI) guidelines to facilitate faster and more efficient invoice financing. The TReDS platform operated by RXIL is a highly sophisticated digital platform that is currently handling 35,000 MSMEs, processing about ₹8,000 crore in invoice financing per month. TechCircle interviewed Dhaval Kulkarni, the chief technology officer of RXIL understand the technology components of the platform.

The TReDS platform enables MSMEs to get early payments through invoice discounting, while factoring is a key product that RXIL offer. Factoring is a way for businesses, especially MSMEs, to get early payment for their invoices instead of waiting for their customers (large corporates) to pay later. Large corporates onboard their MSME vendors, and the platform also onboard banks with factoring licenses to facilitate financing.

MSMEs upload invoices, but funding begins only after the corporate accepts them. Banks then bid to offer the best discounting rate, and once a bid is accepted, the financier pays the MSME. On the due date, the corporate repays the financier (the bank), ensuring the MSME has no repayment risk. This system improves cash flow for MSMEs, reduces payment delays, and creates a transparent, secure financing ecosystem.

Tech needs for each of the stakeholders

“There are three important personas here  — the MSME, the large corporate, and the bank. The technology aspects have to be tailored to the requirements of each of these three stakeholders,” said Kulkarni. 

Since many MSMEs operate in remote areas across India, onboarding them efficiently is a major challenge, he said.” To address this, we developed a fully digital, intuitive onboarding platform, ensuring seamless registration while complying with RBI’s KYC mandates. Our platform allows MSMEs to register in just 15 minutes by entering basic business details.”

Further, the large corporates’ needs differ significantly from MSMEs. They require seamless data integration, ensuring visibility into transactions flowing in and out of their accounts. Their top priority is integrating the platform into their existing ecosystem, Kulkarni said.

“Since every corporate operates differently, they also demand customized workflows—some may require a single verifier, while others need multi-level authorization. Additionally, security and audit trails are crucial, requiring robust compliance measures. To meet these needs, we have developed a cloud-based ERP integration framework.”

RXIL offers open APIs, allowing corporates to integrate our platform within their systems while maintaining data security protocols.

Lastly, security takes center stage, ensuring that transactions are protected and compliant. “Our cloud-based architecture and API-driven ecosystem provide a robust, secure, and efficient framework for all three personas.”

Technology investment

“As our platform grows, our pace is directly tied to business expansion,” Kulkarni told TechCircle. In the last five years, the volume of invoice financing processes has seen a 10x increase. 

“To scale, we prioritized seamless digital onboarding and, six years ago, migrated from on-premises to Oracle Cloud. Oracle has been our key tech partner, providing services like low-code/no-code solution for fast module development, zero trust architecture security , and Secure DevOps. Recently, we’ve explored analytics automation to enhance operations further.” Further, RXIL also relies on specialized vendors for real-time security monitoring, such as Zscaler.

Kulkarni leads an internal technology team of 60 members. It comprises project managers, Scrum Masters, solution architects, the analytics team, and DevOps professionals. Quality Assurance (QA) focuses on maintaining high software quality and performance, while the infrastructure and security is responsible for audits, policy implementation.

Last financial year, the company dedicated 40% of its expenditure towards technology spend, which includes infrastructure and provisioning, payroll expenses, and others security maintenance. 

Kulkarni concluded by saying that going forward, the focus would be to deal with challenges related to security, scalability, and sustainability.

Note: The author was in Mumbai for the Oracle CloudWorld Tour at Oracle’s invitation.