How the MSME ODR portal is helping small businesses recover delayed payments

India’s micro and small enterprises (MSEs) often struggle to receive timely payments for their goods and services. To address this issue, the Ministry of Micro, Small and Medium Enterprises has introduced the MSME ODR portal, a digital platform that streamlines the process of disputing delayed payments. The portal allows small suppliers to file claims, participate in virtual conciliation meetings, and seek resolutions without the need for legal representation.

The MSME ODR portal has already demonstrated significant benefits for small businesses. Accounts from enterprises in Telangana indicate that the platform is reducing both the time and cost associated with recovering delayed payments. Delayed payments can have far-reaching consequences, affecting salaries, raw material purchases, and loan repayments.

The MSMED Act of 2006 mandates that buyers pay MSE suppliers within 45 days, with compound interest levied on defaults. Additionally, suppliers can refer disputes to Micro and Small Enterprises Facilitation Councils (MSEFCs) for resolution.

Before the launch of the MSME ODR portal, pursuing a claim involved extensive paperwork, travel to district headquarters, and multiple hearings. The Samadhaan portal, launched in 2017, allowed filing online but primarily served as a tracking system. For many small suppliers, the effort of recovering unpaid dues outweighed the potential recovery amount. The MSME ODR portal, however, has transformed this process by enabling online filing of claims from the moment of dispute to settlement.

Since its launch on June 27, 2025, all new delayed-payment cases must be filed on the portal. The portal manages the entire case lifecycle, from filing to settlement, encompassing notices, conciliation meetings, and hearings. While states continue to operate the councils responsible for resolving disputes, the portal has already yielded positive results.

In Telangana, for instance, over 800 cases have been filed through the ODR ecosystem, with around 85 resolved. The majority of these cases involve small businesses that have successfully resolved disputes through conciliation, saving considerable legal costs.

One case highlighted by the Ministry involved Eminent Engineers, a proprietorship in Medchal-Malkajgiri that supplied goods to a defaulting buyer. The proprietor filed the claim online in under an hour, and within a week, the buyer responded, and the matter was settled in a single conciliation sitting. The proprietor estimated savings of around Rs 50,000 in legal costs.

Another case involved Neemus Software Solutions, which resolved nine out of eleven pending delayed-payment matters through the mechanism, with most respondents choosing not to contest. Similarly, PeopleLink Unified Communications, a Hyderabad-based company, has turned to the council as a routine recovery channel, resolving matters in under a month.

The early indications from the Ministry suggest that more than 800 cases have been filed in Telangana through the ODR ecosystem, with approximately 85 resolved. However, the resolution rate remains modest, reflecting the platform's recent launch and the time required for conciliation when buyers contest claims. Despite this, the MSME ODR portal holds promise for making delayed-payment recovery a routine business process, provided the number of councils can match the speed of these early successes.