Team Adda247 and BankersAdda are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is World Bank: 500 million dollar scheme for Indian MSMEs.
World Bank: 500 million dollar scheme for Indian MSMEs
The World Bank has approved a 500 million dollar support program for micro, small and medium enterprises (MSMEs) in India that has been deeply impacted by the Covid-19 pandemic. The support is aimed at improving the performance of 555,000 MSMEs and is expected to mobilize $15.5 billion as part of the government’s $3.4 billion MSME competitiveness- A post-Covid Resilience and Recovery Programme (MSRP).
Along with the $750 million MSME Emergency Response Programme that was approved in July last year, the latest loan takes total WB support to MSMEs to $1.25 billion over the past year. According to World Bank, in India’s GDP 30% contribution is out of the nearly 58 million MSME’s, and in that 40% of MSMEs had no access to formal sources of finance. Junaid Ahmad (World Bank country director in India) said that the MSME sector is a critical backbone of the Indian economy which has been hard hit by the pandemic, this program intensifies efforts to support firms to return to pre-crisis production and employment levels while lying the foundations for long-term productivity-driven growth.
The Raising and Accelerating MSME performance program, through which the World Bank funding will be channeled, will provide better access to finance and working capital for MSMEs by strengthening the receivable financing markets. It will set up a high-level MSME council to enable better coordination between national and state-level programs.
The program will target five states- Gujarat, Maharashtra, Punjab, Rajasthan, and Tamil Nadu in starting which could be expanded later on. The loan comes from the International Bank for Reconstruction and Development (IBRD) with 18.5 years maturity and 5.5 years grace period.