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MSMEs can take over 12 months to recover, claims Dun & Bradstreet report

Updated: Apr 29, 2020 06:31:09am
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MSMEs can take over 12 months to recover, claims Dun & Bradstreet report

New Delhi, Apr 29 (KNN) The unprecedent lockdown has created havoc across India and has brought businesses to a standstill, especially Micro Small and Medium Enterprises (MSMEs) who are almost on the verge of closure, if COVID-19 pandemic lasts longer.

Putting MSMEs at halt through lockdown will impact India’s GDP growth for FY21 and is expected to sharply decline than what was estimated earlier.

According to Dun & Bradstreet's latest report, MSMEs are to be severely impacted and could take over 12 months to recover due the disruptions caused by the pandemic.

The D&B in its report has that the impact on MSMEs will be severe and will accompany small business for a longer time.

''Recessionary pressures across the globe are expected to have a direct impact on the level of global exports. Given that MSMEs contribute to over 40 per cent of India's exports, the impact will be severe and linger for a longer time,'' said D&B report.

Delayed payments have remained headache for the MSMEs since long despite having law for it. D&B in its report warned that MSME can face severe financial crunch.

''MSMEs are expected to experience severe liquidity problems due to delayed payments from their customers,'' added the report.

As per MSME Minister Nitin Gadkari, the government and big business together owe these small firms nearly Rs six lakh crore.

The further said that that the strain in the banking system is expected to increase the credit gap for MSMEs.

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