Trends in Digital Supply Chain Finance for MSME in India: Evidence from India’s TReDS Platforms

Abstract

Digital financial infrastructure has increasingly become a critical instrument for addressing credit constraints faced by Micro, Small and Medium Enterprises (MSMEs) in emerging economies. This study examines the growth and structural dynamics of digital supply chain finance in India using transaction-level indicators from the Trade Receivables Discounting System (TReDS). Secondary data covering the period 2022–2025 are analysed using descriptive statistics, compound annual growth rate estimation, linear regression trend analysis, and correlation analysis. The findings reveal a strong upward trajectory in both the number and value of factoring transactions on TReDS platforms. Notably, transaction value grows faster than transaction volume, suggesting an increase in the average financing size for MSMEs. Regression-based trend estimates confirm statistically significant temporal growth in digital receivables financing activity. Platform-level comparisons reveal heterogeneity in performance and market participation across TReDS operators. Correlation analysis further demonstrates a strong positive relationship between transaction volume and transaction value, indicating complementary growth in scale and financial depth. The study contributes empirical evidence to the literature on digital finance and MSME development and highlights the role of platform-based financial intermediation in improving working capital access for small enterprises in emerging economies.