World Bank sanctions $500 million MSME financing programme
Not even a year after the World Bank made its first interposition to help Covid-hit MSMEs in India with the $750 million MSME Emergency Response Program, the global financial organization has decided to provide an additional $500 million programme which will be referred to as (RAMP) Raising and Accelerating Micro, Small and Medium Enterprise Performance to support further government’s initiative to help them recover from the Covid peril.
The World Bank remarks RAMP aims to improve the performance of 5.55 lakh MSMEs and is likely to mobilize financing of $15.5 billion as part of the government’s $3.4 billion MSME Competitiveness – (MCRRP) A post-Covid Resilience and Recovery Programme.
With the help of RAMP, “the World Bank’s financing for improving the productivity and financial viability of (MSMEs) amounts to $1.25 billion over the past year,” the announcement released on Friday further added.
Furthermore, the programme will back the government’s efforts to enhance the productivity of MSMEs and financing “in the economic recovery phase, crowd in private sector financing in the medium term, and tackle long-standing financial sector concerns” that are limiting MSMEs’ growth. Last year’s MSME Emergency Response Program, 5 million MSMEs have accessed finance from the government programme, as of June 4, 2021. As reported by the World Bank, over 90 per cent of MSMEs in India have less than five workers.
Junaid Ahmad, World Bank Country Director in India, said, “The RAMP program will strengthen its efforts to support firms to return to pre-crisis production as well as employment levels while laying the footing for longer-term productivity-driven growth and generation of much-needed jobs in the MSME sector”.
The $500 million loans from the (IBRD) International Bank for Reconstruction and Development has a maturity of 18.5 years, including a 5.5-year grace period.