ANNOUNCEMENT 30 Jun 2020
In June 2020, the Government of India signed an agreement in order to provide USD 750 million financial support to SMEs affected by the COVID-19 pandemic.
NUMBER OF INTERVENTIONS
World Bank Approves $750 Million Emergency Response Program for Micro, Small, and Medium Enterprises in India
On 30 June 2020, the Government of India signed an agreement with the World Bank to extend financing of up to USD 750 million to the government's Micro, Small, and Medium Enterprises (MSME) Emergency Response programme. Under the programme, the government will provide financing to MSME entities economically affected by the COVID-19 pandemic. No end date of the scheme was declared.
This includes financing instruments such as credit guarantees to reduce the risk of lending by banks and Non-Banking Financial Companies (NBFCs) to MSMEs. Additionally, the funds will be used for supporting the government's refinance facility for NBFCs, directly supporting Small Finance Banks (SFBs) through loans and equity, and incentivizing the use of fintech and digital financial services for MSME lending and payments.
The USD 750 million loan will be extended from the International Bank for Reconstruction and Development (IBRD) and will have a maturity of 19 years including a 5 year grace period.