The Indian MSMEs still face significant challenges, including the persistent ‘Delayed Payments’ issue. This problem has been a longstanding concern, with approximately INR 10.7 lakh crore locked up in delayed payments from buyers to MSME suppliers, exacerbating the need for working capital. Regulatory entities, including factoring NBFCs, possess the authority to report credit information to credit bureaus like CIBIL when small entities delay payments to MSME suppliers. Being reported as a defaulter can have significant repercussions on the entity’s creditworthiness, leading to potential difficulties in accessing credit from banks and other financial institutions, which can be highly discouraging for these small businesses. On the other hand, the Indian government has implemented the Micro, Small, and Medium Enterprises Development Act, 2006 (MSMED) to assist MSMEs in recovering payment dues from private companies, PSUs, and individual company owners.