Need For Inclusive Credit Delivery

The MSME sector has been witnessing liquidity stress due to prolonged economic slowdown. The COVID-19 pandemic has made the scenario even more challenging as the lenders have drastically reduced their credit exposure to the sector. On the other hand, economic disruptions due to COVID-19 have disturbed the cash-flow cycle of the MSMEs. As a result, the SME sector which contributes approximately 25 per cent to the GDP from the service segment and more than 33 per cent to the manufacturing output is going through immense working capital stress. And a section of the SMEs becoming unsustainable because of liquidity stress is not a good sign for the economy, as the sector generates 1.3 million jobs every year. So, given the role the SMEs have been playing to drive the economy forward, the segment needs to be rejuvenated so that economy gets back on track and becomes truly self-reliant. The...