The MSME package should relieve small firms that have been hit hard by the covid-induced lockdown and are short of cash. Micro, small and medium enterprises (MSMEs) appear to be the biggest beneficiaries of Wednesday’s unveiling by finance minister Nirmala Sitharaman of the first tranche of India’s big-bang stimulus.
Among the measures, these companies will be offered collateral-free loans for tenures of up to four years, with the government as a 100% guarantor of total advances worth ₹3 trillion.
The interest to be charged is yet to be declared, though. The Centre also announced a “fund of funds" equipped with a sizeable corpus to invest in the equity of MSMEs, the definition of which has been tweaked to let slightly larger businesses