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MSMEs looking to list? Govt willing to buy 10% of your bonds

Sandeep Soni
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Credit and Finance for MSMEs: To encourage small and medium enterprises (SME) in the country list on public markets to raise capital, the government will buy the bonds issued by small businesses. "If they are going to issue bonds in the capital market, 10 per cent will be purchased by the government. That can be a good boost," MSME minister Nitin Gadkari said on Monday. The ministry is already in talks with the Finance ministry for seeking the sanction of a Rs 10,000-crore fund to purchase equity in SMEs who are looking to list themselves in bourses.

"We have created a Rs 10,000-crore fund and probably the Finance minister has promised (for that). We are supporting MSMEs who have the potential for good exports," Gadkari said. The ministry is hoping a two-three times increase in its 10 per cent buy into MSMEs in three-four years "so that we can keep rolling this fund as the government alone cannot do all the things in this age and time," the minister had said at an event recently.

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Access to credit and finance remains perhaps the biggest challenge for small businesses to run their business operations smoothly even as delay in payments from large PSUs, and private enterprises to MSMEs has been choking small units. The government had also been seeking access to low-cost capital for MSMEs from the Asian Development Bank (ADB), World Bank, and German state-owned development bank KfW. "We have already sanctioned credit limit from World Bank, ADB, and KfW. While "we want to route it through nationalised banks but we have taken the decision to route all schemes with cooperative banks, urban cooperative banks, district cooperative banks, and even NBFCs. So we are planning for that," Gadkari said.

The government is also going to formulate a credit rating system for MSMEs for those looking to invest and partner with them take better business decisions. "Credit rating system based on digital data, now we are going to start it…It can be more easy for you to make a business decision because the rating is now very important. So we are now formulating policy and we are going to make some scheme for that," Nitin Gadkari added. MSME ministry is also planning a website to publish success stories of 100 women entrepreneurs from different sectors.