World Bank offers USD 750 mn loan for domestic COVID-hit MSMEs
The 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 India’s micro, small, and medium enterprises (MSMEs), severely impacted by the COVID-19 crisis.
New Delhi
The MSME Emergency Response program will address the immediate liquidity and credit needs of some 15 lakh viable MSMEs to help them withstand the impact of the current shock and protect millions of jobs, a release said. “This is the first step among a broader set of reforms that are needed to propel the MSME sector over time,” it said.
The $750 million loan from the International Bank for Reconstruction and Development (IBRD), has a maturity of 19 years including a 5-year grace period. The World Bank Group, including its private sector arm - the International Finance Corporation, will support the Centre’s initiatives to protect the MSME sector by unlocking liquidity and strengthening NBFCs and small finance banks and enabling financial innovations. This will support the efforts to channel liquidity to the MSME sector by de-risking lending from banks and Non-Banking Financial Companies (NBFCs) to MSMEs through a range of instruments, including credit guarantees.
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