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$750 million Agreement signed by World Bank and Government of India for MSME

$750 million Agreement signed by World Bank and Government of India for MSME

The Indian government has signed a $750 million agreement with the World Bank for the Emergency Response Programme of Micro, Small and Medium Enterprises.

Key Points:

  • Under the agreement, the World Bank aims to provide assistance to MSMEs severely affected by the COVID-19 pandemic with the increased flow of finance.
  • The MSME Emergency Response Programme by the World Bank, will resolve the immediate credit and liquidity requirements of around 1.5 million potential MSMEs and will provide the MSMEs with a cushion against the shock and will help in protecting millions of jobs.
  • The measure taken by the World Bank and the Indian government is a first in the wider set of reforms required to push the MSME sector.
  • The Additional Secretary, Department of Economic Affairs, Ministry of Finance has signed the agreement on behalf of the Indian government and by the Country Director of India, Mr Junaid Ahmad, on behalf of the World Bank.
  • The initiative for the protection of MSMEs will be supported by the Private sector arm of the World Bank, the International Finance Corporation (IFC) along with the Bank by Unlocking liquidity, Enabling financial innovations, Strengthening NBFCs and Small Finance Banks (SFBs).
  • The International Bank for Reconstruction and Development (IBRD), has provided the $750 million loan with a maturity of 19 years and a 5-year grace period.

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