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UPSC Prelims 2026 GS Paper 1, question 93

Topic: Economy

Q93

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.

Select the answer using the code given below :

  1. (a) 1, 2 and 3
  2. (b) 2 onlyCorrect answer
  3. (c) 2 and 3 only
  4. (d) 1 only

Solution.

Answer: (b) 2 only

  1. Statement 1 is incorrect: M1xchange does not lend from its own balance sheet or provide collateral-based loans; financing on TReDS is collateral-free (without recourse to the MSME seller).
  2. Statement 2 is correct: M1xchange is an RBI-licensed Trade Receivables Discounting System (TReDS) digital exchange that facilitates the discounting of MSME trade invoices and Bills of Exchange through participating banks and NBFC factors.
  3. Statement 3 is incorrect: M1xchange is an electronic bill-discounting marketplace, not a SEBI-registered credit rating agency.