The COVID-19 crisis has had a severely negative impact on many Indian businesses. Over 400,000 people have died in the country as a result of the pandemic, leading to prolonged, widespread lockdowns throughout the country. This means that India's small and medium-sized enterprises (SMEs) are struggling to achieve their growth targets. In fact, a majority of them are still struggling to record consistent revenues and find new funding. Fortunately, the World Bank has recently approved a $500 million program to support India's MSME sector, which may help to ameliorate the situation somewhat in the near future. This blog examines the additional investment and its possible impact on the industry.
World Bank's New Initiative in India
The World Bank's new funding will be made available to approximately 55,000 MSMEs in India. Its primary objective is to raise and accelerate the growth of micro, small, and medium-sized enterprises (MSMEs). This program is striving to ensure that this specific group of businesses does not suffer in terms of growth, especially since the COVID-19 pandemic has impacted them hard. This funding is extremely important for the trade industry as well, since India's MSMEs are regarded as the backbone of its exports.
“The MSME sector, a critical backbone of India’s economy, has been hard hit by the Covid-19 pandemic...The RAMP program will intensify efforts to support firms to return to pre-crisis production and employment levels, while laying the foundations for longer-term productivity-driven growth and generation of much-needed jobs in the MSME sector,” stated Junaid Ahmad, the World Bank country director for India.
The 500 Million Dollars package includes promoting institutional ability and coordination, assisting firms in developing capacities and reaching new markets, and boosting the overall productivity of the MSME sector.
Although India has a well-developed banking industry and private lending firms, raising funds might be difficult, especially during a pandemic. As a result, this new initiative could be a game changer for MSMEs attempting to bounce back from the crisis.
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