Module: General Practice
Q40: The Trade Receivables Discounting System (TReDS) is a digital platform to solve the liquidity crunch of MSMEs. Which of the following entities are the mandatory participants in the TReDS ecosystem?
MSME Sellers (Suppliers).
Corporate and Government Buyers.
Financiers (Banks and NBFCs).
Insurance Companies.
Select the correct combination:
Corporate and Government Buyers.
Financiers (Banks and NBFCs).
Insurance Companies.
Select the correct combination:
✅ Correct Answer: A
The TReDS platform acts as an electronic exchange to trade receivables (unpaid invoices). It involves three mandatory stakeholders: (1) MSME Sellers (who upload invoices), (2) Buyers (Corporates, PSUs, and Govt Departments who accept liability), and (3) Financiers (Banks and NBFCs who bid to discount the invoice). While credit insurance is a risk tool, Insurance Companies are not mandatory participants in the transaction settlement flow on the platform.