World Bank to give $750 million funding support to small businesses; lauds India’s MSME support package
In order to increase liquidity access for viable small businesses affected by the COVID-19 pandemic, the World Bank will give a USD 750 million-budget support to 15 crore MSMEs (Micro, Small and Medium Enterprises) in India.
The MSME funding is under the multilateral lender’s Development Policy Loan, which is direct budget support, sources said.
Praising the Indian government’s Rs 3.7 lakh crore MSME support package under ‘Self-Reliant India’, World Bank Country Director in India Junaid Ahmad said the Reserve Bank of India, the country’s central bank, has used different instruments in order to infuse liquidity in the market either through banks or SIDBI (Small Industries Development Bank of India).
In May, India announced a support package of Rs 3.70 lakh crore for the MSME sector, which included Rs 3 lakh crore collateral-free loans for small businesses.
Mr Ahmad added the government steps would help unlock liquidity for MSMEs, strengthen NBFCs and small finance banks and enable inclusive access to financing.
It is to be noted here that World Bank has extended USD 5.13 billion loans to India during the 2020 fiscal (July 2019-June 2020).