WORLDBANK APPROVES 500 M TO SUPPORT MSME’S

WORLDBANK APPROVES 500 M TO SUPPORT MSME’S

Subject: International Relations

Context: The World Bank’s Board of Executive Directors has approved a $500 million program to support India’s nationwide initiative to revitalize the MSME sector, which has been heavily impacted by the COVID-19 crisis.

Concept:

• The $500 million Raising and Accelerating Micro, Small and Medium Enterprise (MSME) Performance (RAMP) Program is the World Bank’s second intervention in this sector, the first being the $750 million MSME Emergency Response Program, approved in July 2020 to address the immediate liquidity and credit needs of millions of viable MSMEs severely impacted by the ongoing COVID-19 pandemic.
• The RAMP Program will support the Government of India’s efforts to increase MSME productivity and financing in the economic recovery phase, crowd in private sector financing in the medium term, and tackle long-standing financial sector issues that are holding back the growth of the MSME sector.
• The RAMP program will provide better access to finance and working capital for MSMEs by strengthening the receivable financing markets;
• It will scale up online dispute resolution mechanisms to address the problem of delayed payments. Such efforts are expected to improve the cost-effectiveness, quality, accessibility, impact, and outreach of such schemes.