World bank, India sign USD 750 million agreement for MSME emergency response programme

New Delhi, July 7 (KNN) The world bank and the government have signed a USD 750 million (about Rs 5,600 crore) agreement for the Micro, Small and Medium Enterprises (MSME) Emergency Response Programme.

The agreement was signed by Sameer Kumar Khare, Additional Secretary at the Department of Economic Affairs, on behalf of the government and Junaid Ahmad, Country Director (India) on behalf of the World Bank on Monday.

It aims at supporting increased flow of finance into the hands of MSMEs which are severely impacted by the COVID-19 crisis.

The programme will address immediate liquidity and credit needs of nearly 15 lakh viable MSMEs to help them withstand the impact of the current shock and protect millions of jobs. This is the first step among a broader set of reforms that are needed to propel the MSME sector over time.

Khare said that the Covid-19 pandemic has severely impacted the MSME sector leading to loss of livelihoods and jobs.

''The government is focused on ensuring that abundant financial sector liquidity available flows to non-banking finance companies (NBFCs) and that banks which have turned extremely risk-averse continue taking exposures in the economy,'' he said in an official statement.

"The project will support the government in providing targeted guarantees to incentivise NBFCs and banks to continue lending to viable MSMEs to help sustain them through the crisis," he added.