Equity support to MSMEs soon, Rs 10,000 crore to be allotted

Government is considering a proposal to create a Rs 10,000 crore fund to buy up to 15 per cent equity in crisis-hit, but otherwise well-rated, MSMEs.

   
msme emergency credit scheme loan

The novel coronavirus, Covid-19 has hit the Indian economy. Due to lockdown, small businesses are facing the major brunt. As per news reports, the government is considering a proposal to create a Rs 10,000 crore fund to buy up to 15 per cent equity in economic crisis-hit, but otherwise well-rated, MSMEs. Some reports claim that the MSME ministry has submitted this plan with the finance ministry too.

Meanwhile, the central government is also weighing another proposal to create a Rs 10,000-crore fund of funds for these small businesses, along the lines of the one meant for start-ups.

It is said that this fund of funds may make downstream investments in venture capital and alternative investment funds that will, in turn, invest in MSMEs with AAA or AA-rated ratings.

In fact, the national small industries corporation under the MSME ministry or SIDBI will likely be tasked to control the funds. On the other hand, the ministry of micro, small and medium enterprise is building a scheme for credit rating to these businesses, based on their annual turnover, exports and GST payments.