BRICS Pushes Affordable Finance, Trade Credit To Strengthen MSME Global Value Chain Integration

New Delhi, Sep 14 (KNN) BRICS countries have reaffirmed their commitment to strengthening the internationalisation of micro, small and medium enterprises (MSMEs), identifying access to affordable finance as a major constraint to their participation in global trade and value chains.

The New Delhi Declaration, adopted at the BRICS Summit chaired by India, highlighted the need to improve access to formal finance and trade finance for MSMEs to support their integration into global value chains (GVCs).

New Credit Assessment Framework

The grouping welcomed guiding principles for credit assessment frameworks for export-oriented MSMEs that use diverse data sources to address information gaps and improve risk assessment, reported PTI.

The framework is aimed at reducing information asymmetry and expanding formal finance to underserved MSMEs, particularly those that may lack conventional financial records or collateral.

BRICS also stressed the importance of innovative financing mechanisms, including digital and platform-based solutions involving multiple stakeholders, to make trade finance more accessible to smaller businesses.

Invoice Discounting For Working Capital

The declaration welcomed the Jaipur Consensus to study the establishment of an Invoice Discounting Mechanism for BRICS members.

The proposed mechanism could enable MSMEs to discount invoices, unlock working capital and strengthen their ability to participate in international trade.

The grouping also recognised initiatives undertaken by the BRICS SME Working Group and commended India’s BRICS Chairship for convening the inaugural BRICS SME Forum in Agra.

The forum’s report, “Advancing MSME Competitiveness in BRICS: Strengthening Access to Finance & Technology and Sustainable Growth”, was recognised for its potential to promote cooperation, exchange of best practices and inclusive growth among MSMEs.

BRICS countries also welcomed a framework for cooperation under the SME Working Group and supported convening the second BRICS SME Forum.

(KNN Bureau)