“The more recent development is the move towards creating a secondary market for TReDS receivables. The Union Budget 2026-27 proposed treating TReDS receivables as asset-backed securities, which can potentially allow a much wider class of institutional investors to participate in the market. This is particularly significant for mutual funds, insurers and other institutional investors, as securitization of TReDS receivables could allow banks and other financiers to sell down their exposure to institutional investors, thereby releasing capital and enabling financiers to fund more MSME transactions,” he said.