World Bank, government of India sign $750 mn agreement to support MSMEs amid Covid-19 crisis
The World Bank and the central government has signed an agreement worth $750 million to boost the flow of finance to micro, small, and medium enterprises (MSMEs) amid the Covid-19 crisis, the Ministry of Finance stated.
The agreement is for the MSME Emergency Response Programme which will provide increased financial support to the MSMEs that have borne the impact of the coronavirus crisis in the past few months.
“The World Bank’s MSME Emergency Response program will address the immediate liquidity and credit needs of some 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,” read a statement released by the World Bank.
On the behalf on the Government of India, the agreement was signed by Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance and Junaid Ahmad, Country Director, India on behalf of the World Bank.
“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,” Khare said.
The international baning body, including its private sector arm – the International Finance Corporation (IFC), will support the government’s initiatives to protect the MSME sector by “unlocking liquidity, enabling financial innovations” and supporting “key market-oriented channels of credit such as the NBFCs and Small Finance Bank (SFBs),” the release read.