World Bank approves program to boost MSME sector
World Bank has approved a USD 500 million program to boost MSME sector in India.
World Bank Programme
- World Bank programme called “USD 500 million Raising and Accelerating Micro, Small and Medium Enterprise (MSME) Performance (RAMP) Program” aims to improve performance of five lakh 50 thousand MSMEs.
- It was announced because out of 58 million MSMEs, more than 40 per cent lack access to formal sources of finance in India even though MSME sector is the backbone of Indian economy. It contributes 30 percent in India’s GDP and 40 percent in exports.
- Programme is second intervention by World Bank in MSME sector. First was Rs 750 million MSME Emergency Response Program which was approved in July 2020.
- RAMP program will provide better finance and working capital for MSMEs by strengthening receivable financing markets.
- It will also scale up online dispute resolution mechanisms and address the issue of delayed payments.
MSME Emergency Response Program
Emergency Response programmes, signed between World Bank and Government of India, are dedicated to enhance resilience of communities and livelihoods to address fragility, poverty and vulnerability pertaining to conflict and disaster. Under this program, USD 750 million loan was granted from International Bank for Reconstruction and Development (IBRD) with maturity of 19 years. This loan will boost government’s efforts to channel liquidity towards MSME sector by de-risking lending from banks and Non-Banking Financial Companies (NBFCs).
Month: Current Affairs - June, 2021
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