New Delhi (NVI): The World Bank and Government of India today signed an agreement worth USD 750 million for the MSME Emergency Response Programme to boost the flow of finance into the hands of micro, small, and medium enterprises (MSMEs), severely impacted by the COVID-19 crisis.
The World Bank’s MSME Emergency Response Programme will address the immediate liquidity and credit needs of nearly 1.5 million viable MSMEs to help them withstand the impact of the current shock and protect millions of jobs.
This is the first step among a broader set of reforms that are needed to propel the MSME sector over time, a Ministry of Finance release stated.
The agreement was signed by Sameer Kumar Khare, Additional Secretary, Ministry of Finance and Junaid Ahmad, Country Director (India) on behalf of the World Bank.
Khare said, “The Government of India is focused on ensuring that the abundant financial sector liquidity flow is available to NBFCs, and that banks which have turned extremely risk averse, continue taking exposures in the economy by lending to NBFCs. This project will support the Government in providing targeted guarantees to incentivize NBFCs and banks to continue lending to viable MSMEs to help sustain them through the crisis.”
The World Bank Group, including its private sector arm – the International Finance Corporation (IFC), will support the government’s initiatives to protect the MSME sector.
Junaid Ahmad, World Bank’s Country Director said, “The MSME sector is central to India’s growth and job creation and will be key to the pace of India’s economic recovery, post COVID-19. The immediate need is to ensure that the liquidity infused into the system by the government is accessed by MSMEs. Equally important is to strengthen the overall financing ecosystem for MSMEs.”
The World Bank has till date committed USD 2.75 billion to support India’s emergency COVID-19 response, including the new MSME project.
–CHK
