The World bank has recently approved a loan of dollar 750 million. The aim of this is to help increase the flow of finance into the hands of micro, small and medium enterprises or MSMEs in the country. These enterprises are the worst hit by the coronavirus caused pandemic and consequent economic shutdown. The government announced that this package will support the MSME industry under its self reliant India program.
The world bank’s MSME emergency response program will cater the immediate liquidity and credit requirements of nearly 1.5 million enterprises. This would help them deal with the impact of the current economic disturbance and also safeguard millions of employment opportunities.
Indian MSME sector currently holds a share of 30% in the total GDP of the country and 40% of exports and also provides employment to nearly 150 to 180 million people. The sector is now facing severe stress due to to cancelled orders, loss of customers and also disrupted supply chain. All this is leading to an acute decline in their operational revenue.
World Bank country director in India, Junaid Ahmad, set in announcement that the MSME sector is is the centre of India’s growth and job creation and will also be Central to the the Indian economy revival after the pandemic. To ensure that the liquidity infused into the the economy is accessible to these enterprises is the need of the hour and it is equally important to support the overall financing ecosystem for them.