World Bank to support India's MSME sector

The backbone of India's economy, small businesses will take long to recover, the World Bank has zeroed in on the sector with a $750 million emergency response program and is working with the government on building a platform for MSMEs to get financiers to take on raised invoices -cutting through the delay that MSMEs face in receiving payments India's MSME sector forms the life-blood of India's economy; contributing to 30 per cent of India's GDP and 40 per cent of exports. After a slew of interventions by the World Bank targeted towards health and migrant labour post-Covid in India; the bank approved a $750 mn MSME Emergency Response program to support increased flow of finance into the hands of micro, small and medium enterprises. The bank identified massive liquidity issues hurting the MSME sector and constraints in the flow of finance from banks and NBFCs to the MSMEs as some of the main issues that need to be resolved to enable the MSMEs to participate in the recovery of the business cycle. Through this operation, we are providing resources to the government for its support program towards the MSME sector," said Mehnaz Safavian, Financial Sector Specialist at World Bank Group in an interview to India Today.