Impact of COVID-19 Packages on MSME Financing in India

Silu Muduli

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: The small, micro, and medium enterprise (MSME) sector in India was severely affected during the COVID-19 pandemic. The Government of India and the Reserve Bank of India brought numerous policy measures to revive and provide external liquidity support to borrowers in the MSMEs sector. Credit growth picked up in the MSME sector following the introduction of the Emergency Credit Line Guarantee Scheme (ECLGS) scheme in May 2020, particularly of a loan of size less than 10 lakh. Initially, it benefited borrowers already having a relationship with the bank, later the benefit passed to new borrowers. On the usage of funds, nearly 45 per cent of these loans were used for clearing dues of vendors and 29 per cent to restart the business. On the performance of ECLGS loans, 88 per cent of loans are standard assets and 1.96 per cent are non-performing assets as of March 31, 2021.

Keywords: COVID-19; MSMEs Relief packages; MSME financing (search for similar items in EconPapers)
JEL-codes: G28 G32 H12 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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