The Reserve Bank of India (RBI) is proposing significant reforms to the Trade Receivables Discounting System (TReDS) to enhance support for micro, small, and medium enterprises (MSMEs) amid ongoing payment delays. The reforms aim to simplify the onboarding process for MSMEs, allowing more businesses to access this financing platform. The entry threshold for new participants has been reduced from a paid-up capital of ₹100 crore (approximately $12 million USD) to a minimum net worth of ₹25 crore (around $3 million USD). This move is expected to encourage greater participation from lenders, including banks and non-banking financial companies (NBFCs), who can now avail of guarantee covers for their exposures, thereby reducing financing risks. MSMEs are vital to the Indian economy, accounting for 35.4% of manufacturing and 48.58% of exports, with over 74.7 million firms employing 328.2 million people. However, approximately ₹8.1 trillion is tied up in delayed payments, straining working capital. The reforms also include the establishment of a Credit Guarantee Fund Trust for Micro and Small Enterprises to assist lower-rated corporates. As exporters face challenges with long receivable cycles and rising costs, access to timely finance becomes crucial for maintaining competitiveness in global markets.