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World Bank to provide $750 million budget support to 15 lakh MSMEs
Jul-03-2020

World Bank Country Director in India Junaid Ahmad has said that the World Bank will provide a $750 million budget support to 15 lakh Micro, Small and Medium Enterprises (MSMEs) to increase liquidity access for viable small businesses impacted by nationwide lockdown due to Covid-19 outbreak. Lauding the government's support package of Rs 3.70 lakh crore for the MSME sector, which included Rs 3 lakh crore collateral-free loans for small businesses, he said the RBI also has used different instruments to infuse liquidity in the market either through banks or SIDBI.

Ahmad has stated that the $750 million support is in addition to the $2 billion funding the World Bank has already announced for the social and health sector. He said this takes the total lending to India due to Covid-19 to $2.75 billion within three months. He noted that 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. He added that the MSME funding is under the multilateral lender's Development Policy Loan, which is a direct budget support.

He further said ‘in development policy loans, we do not fund a specific expenditure... we give direct budget support when the government puts together policy framework that we believe deserve support. He also said the government steps would help unlock liquidity for MSMEs, strengthen NBFCs and small finance banks and enable inclusive access to financing.

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