Govt Introduces New Credit Support Mechanism For Financially Stressed MSMEs

ENA MSME 2024-07-23 18:23:09 New Delhi, Jul 23 (KNN) Finance Minister Nirmala Sitharaman unveiled a new initiative aimed at bolstering credit availability for Micro, Small, and Medium Enterprises (MSMEs) facing financial stress. The announcement came as part of the government's latest budget presentation. The mechanism is designed to assist MSMEs that are classified under the 'special mention account' (SMA) category due to circumstances beyond their control. This classification typically indicates early signs of financial stress but precedes non-performing asset (NPA) status. This new mechanism will facilitate the continuation of bank credit to MSMEs during their stress period, Sitharaman stated. She emphasised that the initiative aims to prevent these businesses from slipping into NPA classification while providing them with the necessary financial support to maintain operations. Previously, Federation of Indian Micro and Small & Medium Enterprises (FISME), had recommended the government to acknowledge such SMAs and financially stressed enterprises and take necessary measures. A key feature of this program is the guarantee to be provided by a government-promoted fund. This guarantee is expected to encourage lenders to extend credit to eligible MSMEs, even when they are experiencing financial difficulties. The Finance Minister's announcement reflects the government's ongoing efforts to support the MSME sector, which is widely recognised as a crucial component of India's economy. Further details regarding the implementation and specific criteria for this credit support mechanism are anticipated in the coming weeks. (KNN Bureau) 38714 https://knnindia.co.in/news/newsdetails/msme/govt-introduces-new-credit-support-mechanism-for-financially-stressed-msmes 2024-07-23 18:23:09 knnindia.co.in Govt Introduces New Credit Support Mechanism For Financially Stressed MSMEs