2026 GS Paper I, all questions

UPSC Prelims 2026 · GS Paper I

Question 93: Economy and Social Development

Which of the following statements about M1xchange's role in Micro, Small & Medium Enterprises (MSMEs) financing is/are correct ?

  1. 1.M1xchange provides collateral based loans to MSMEs.
  2. 2.M1xchange facilitates discounting of invoices and Bills of Exchange for MSMEs.
  3. 3.M1xchange functions as a credit rating agency for MSMEs.

Select the answer using the code given below :

a1, 2 and 3
b2 only
c2 and 3 only
d1 only

AnswerUPSC’s answer is (b).

M1xchange is a TReDS (Trade Receivables Discounting System) platform authorised by the RBI. MSME sellers use it to discount invoices and bills of exchange with financiers, so they get early payment against receivables from their buyers. It does not give collateral-based loans, and it is not a credit rating agency. So only statement 2 is correct.

  • 1. It is a receivables discounting platform, not a collateral-based lender.
  • 2. TReDS platforms facilitate discounting of invoices and bills of exchange.
  • 3. Credit rating agencies rate MSMEs; M1xchange does not.

How you could have got this

  1. If you were sure statement 1 is not correct, (a) and (d) go: each of them includes 1.

    What you needed to know: It is a receivables discounting platform, not a collateral-based lender.

  2. Then, if you were sure statement 3 is not correct, (c) goes: it includes 3.

    What you needed to know: Credit rating agencies rate MSMEs; M1xchange does not.

Only (b) is left. You didn’t need statement 2.

This follows UPSC’s provisional key; the final key could change it.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong
  • (a) Wrong: it is neither a collateral-based lender nor a rating agency.
  • (b) Right: it facilitates the discounting of invoices and bills of exchange.
  • (c) Wrong: it does not rate MSMEs.
  • (d) Wrong: it does not give collateral-based loans.

Only the provisional key (27 May 2026) was found; the final key replaces it when found.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2026, General Studies Paper I, Series A. The paper on upsc.gov.in.