Centre looks at ways to increase equity investments, financing in MSMEs
₹50,000 crore corpus, out of which ₹10,006 crore would come from the Centre and the rest from private capital or venture capital funds. The ministry of MSMEs last month tweeted saying that about ₹7,593 crore investment has been ploughed into 425 MSMEs in the past three years. In addition, 51 daughter funds – an alternative investment fund -- have been empanelled under the NSIC Venture Capital Funds (NVCFL).
NVCFL, which operates as Mother Fund in SRI Fund, was registered as a Category-II Alternative Investment Fund (AIF) in 2021. The departments also discussed the need for new credit guarantee schemes along with standardizing procedures in current guarantee schemes. Credit guarantee schemes have been a way to ensure liquidity for these small businesses, which were the worst hit by the pandemic and demonetization.
In 2020, the government also launched an emergency credit line guarantee scheme to help stressed businesses access more loans backed by a sovereign guarantee. Now the government is looking at the need for a new credit guarantee for the scheme and also to standardize the process across these different schemes. In its recommendations to the ministry, the Federation of Indian Micro and Small & Medium Enterprises (FISME) said that specific credit guarantees could be promoted to cushion the risk perception of lenders based on gender, social, regional, class, age, and education biases.
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