The World Bank has extended a $750 million loan to Indian Micro, Small and Medium Enterprises (MSMEs) which are severely hit by the COVID-19 pandemic.
During the virtual conference on the announcement of the lending scheme, World Bank’s Director for India, Junaid Ahmad remarked “The MSME sector is central to India’s growth and job creation and will be key to the pace of India’s economic recovery, Post-COVID-19.”
World Bank’s private arm, International Bank for Reconstruction and Development (IBRD) will be extending the loan which his expected to have a maturity period of 19 years, including a 5-year grace period, the bank’s statement said.
The statement also highlighted that the World Bank has offered loans worth $2.75 billion in the last 3 months which contributes to nearly 50% of the country’s annual lending. It also added that World Bank’s annual lending to India which currently stands at $5.13 billion, is the highest in the last decade.
Indian MSME sector is the backbone of the Indian Economy. The sector which has maintained a steady growth rate of 10% over years, contributes to 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities as well as 33.4% of India’s manufacturing output. The sector has also been able to employ close to 120 million persons and contributes around 45% of the overall exports from India.