Over 15 crore Indian MSMEs will get a $750 million boost from the World Bank as the latter has extended help amid the coronavirus crisis.
Credit finance for MSMEs: Over 15 crore Indian MSMEs will get a $750 million boost from the World Bank as the latter has extended help amid the coronavirus crisis. “World Bank’s board of executive directors has approved a $750 million MSME Emergency Response program to support increased flow of finance into the hands of MSMEs, severely impacted by the COVID-19 crisis,” World Bank said in a statement on Wednesday. The funding will also help the government’s cause to protect India’s micro, small and medium enterprises (MSME) sector. The lender had earlier approved a funding of $1 billion each for the social and health sector as the world grapples with the outbreak of coronavirus. The latest fund announcement will help impacted small businesses to get increased liquidity access.
Weeks ahead, the government had also rolled out a special MSME package under its Rs 21 lakh crore economic stimulus amid coronavirus lockdown as it looks to boost India’s manufacturing sector. Under the MSME scheme, the government offers full guarantee on up to 20% additional and collateral-free working capital loans.
This is not the first time that the World Bank has lent a helping hand to India. During July 2019-June 2020, the international financial institution extended $5.13 billion loans to India, which is the highest in a decade. This includes $2.75 billion given in three months in response to the COVID-19 pandemic. The latest funding is under the multilateral lender’s Development Policy Law, which is a direct budget support, Junaid Ahmad, World Bank Country Director in India said. In the next stage of the World Bank’s assistance programme for MSMEs, the lender will also engage with the MSME Ministry and the states to ensure capacity development at cluster level as the lender looks to help government’s initiative to protect the MSMEs by unlocking liquidity, strengthening non-banking financial companies and small finance banks and enable inclusive access to financing.