InvestorQ : How does the policy announcement help the MSME sector, which has been trouble for some time now?
Angel dcosta made post

How does the policy announcement help the MSME sector, which has been trouble for some time now?

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Anamika Sodhani answered.
7 months ago


The medium and small micro enterprises (MSME) space has been under stress since 2016 when they ran into a liquidity crunch post the demonetization. The MSME sector is significant because it accounts for 40% of the exports and nearly 60% of the jobs created. That is why the industry had been demand some monetary relief for the MSME segment. Accordingly, the RBI extended the one-time restructuring scheme for MSME loans by another one year till the end of 2021. RBI clearly stated that the Micro, Small and Medium Enterprises (MSMEs) sector play an important role in the growth of the Indian economy. Now the restructuring under the scheme will have to be implemented by 31st December 2020. This demand was originally made by the FM in her Union Budget speech earlier this month. Accordingly, the RBI in its Monetary Policy Review Meeting announced that that it would be extending the scheme. The CRR concession is also being extended to banks extending loans to MSMEs.