The World Bank’s(WB) Board of Executive Directors has approved a $500 million programme named ‘Raising and Accelerating Micro, Small and Medium Enterprise (MSME) Performance’ (RAMP), to support the Government of India’s nationwide initiative to strengthen the MSME sector, which has been heavily impacted due to COVID-19.
- Maturity: The $500 million loan, which will be provided from the International Bank for Reconstruction and Development (IBRD), an arm of the world bank group, has a maturity of 18.5 years including a 5.5-year grace period.
Targets of RAMP:
i.The program RAMP targets to improve the performance of 555,000 MSMEs. It is expected to mobilize financing of $15.5 billion, as part of the government’s $3.4 billion MSME Competitiveness -A Post-COVID Resilience and Recovery Programme (MCRRP).
ii.Till date 5 million MSME firms have accessed finance from the government’s program.
iii.In addition to national-level activities, the program will initiate targeted activities in five “first mover” states – Gujarat, Maharashtra, Punjab, Rajasthan, and Tamil Nadu.
iv.The program will provide better access to finance for MSMEs by strengthening the receivable financing markets; and scale up online dispute resolution mechanisms to address the problem of delayed payments.
Note – The WB’s financing over 2020 towards improving the MSME sector amounts to $1.25 billion.
WB’s Programme over MSME:
This RAMP program is the 2nd intervention of WB in India’s MSME sector, the 1st one being the $750 million MSME Emergency Response Program, which was approved in July 2020 to address the immediate liquidity and credit needs of millions of viable MSMEs during COVI-19. Click here to know more
About India’s MSME Sector:
The MSME sector is the backbone of India’s economy, as it contributes 30 percent of India’s GDP and 4 percent of exports. Out of some 58 million MSMEs in India, more than 40 percent lack access to formal sources of finance.
Recent Related News:
On April 1, 2021, the World Bank Board of Executive Directors approved a USD 32 Million (~INR 234.80 Crores) Project titled ‘Mizoram Health Systems Strengthening Project’ for improving management capacity and quality of health services in Mizoram.
About World Bank:
President – David R. Malpass(13th President)
Headquarters – Washington DC, USA
World Bank Country Director in India – Junaid Ahmad,