A USD 750 Million loan was approved for the Micro Small and Medium Enterprises (MSMEs) in India by the World Bank Group. The Approval for the loan amount was given on 30th June 2020 by the Board of Executive Directors of the World Bank Group. As a result of the COVID-19 pandemic, the MSME sector is under severe financial stress due to lack of exports and domestic businesses, loan approval is under Emergency Response Program to ensure increased financial support for the MSMEs in India.
- The loan amount will help in addressing the immediate need for liquidity and credit for around 15 lakh (1.5 million) MSMEs in the country.
- The amount will be disbursed through Small Finance Banks (SFBs) and Non-Banking Financial Companies (NBFCs), which will further help in strengthening the SFBs and NBFCs.
Financing of the Loan Amount
- The loan amount will be sanctioned by the lending arm of the World Bank Group- International Bank for Reconstruction and Development (IBRD).
- Including a grace period of 5 years, the loan amount will be has a maturity of 19 years.
Total of USD 2.75 billion committed to date
- With this USD 750 Million loan amount, this is the 3rd loan amount that the World Bank Group has approved under Emergency COVID-19 response to India.
- The first was USD 1 billion in the month of April 2020 for support to the health care sector, while another USD 1 billion in May 2020 for providing food benefits and cash transfers to the financially weaker sections of the society.
- This takes the total World Bank Group has committed to India to USD 2.75 billion under the COVID-19 response to India
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