Which of the following statements about M1xchange's role in Micro, Small & Medium Enterprises (MSMEs) financing is/are correct ?
- 1.M1xchange provides collateral based loans to MSMEs.
- 2.M1xchange facilitates discounting of invoices and Bills of Exchange for MSMEs.
- 3.M1xchange functions as a credit rating agency for MSMEs.
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Answer: B. M1xchange is an RBI-licensed TReDS (Trade Receivables Discounting System) platform. It lets MSMEs sell invoices and bills of exchange to financiers for quick cash. It does not give collateral-based loans and is not a credit rating agency. So 2 only.
Watch for: Students assume any MSME finance platform gives loans.
Why the other options are wrong
- A. Wrong because M1xchange does not lend or rate credit.
- C. Wrong because M1xchange is not a credit rating agency.
- D. Wrong because it does not give collateral-based loans.
Source to check: RBI guidelines on TReDS (2014, revised 2023) and RBI list of authorised TReDS operators, rbi.org.in
Answer from the provisional UPSC key; it may change when the final key is out. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.