The World Bank has approved $500mn loan to the Indian government to help the country’s Micro, Small and Medium Enterprise (MSME) sector which is reeling under the fallout of the COVID-19 pandemic and resulting lockdowns. The loan will have 18.5 years of maturity period with 5.5 grace years.
A program named Raising and Accelerating Micro, Small and Medium Enterprise Performance (RAMP) targets to ease liquidity and credit crunch for MSMEs. The sector contributes to 30pc of India’s GDP but over 40pc units in the sector do not have access to formal finance source.
RAMP aims to aid MSME firms to return to pre-pandemic production and employment levels. It will look at strengthening institutional capacity and coordination and will first initiate activities in five key states – Gujarat, Maharashtra, Punjab, Rajasthan, and Tamil Nadu.