The World Bank has approved a USD 500 million program to help boost India’s MSME sector. The programme targets improvements in the performance of five lakh 50 thousand MSMEs. Out of some 58 million MSMEs in the country, more than 40 per cent lack access to formal sources of finance. The MSME sector is the backbone of the country’s economy, contributing 30 percent of India’s GDP and 40 percent of exports.
The USD 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 Rs 750 million MSME Emergency Response Program, approved in July last year. World Bank Country Director Junaid Ahmad said, the MSME sector, a critical backbone of India’s economy, has been hard hit by the COVID-19 pandemic. The RAMP program will provide better access to finance and working capital for MSMEs by strengthening the receivable financing markets. It will also scale up online dispute resolution mechanisms to address the problem of delayed payments.