The nation-wide lockdown due to the COVID-19 has badly hit business sustainability for over 100 micro, small and medium sized businesses out there which are dealing with their own set of challenges. These MSMEs provide employment, manufacture and trade goods, help the produce from farmers reach consumers, thereby playing an important role in keeping the larger corporations running and the wheels of economy moving.
While this pandemic is hitting all aspects of life and economy, the impact has been extremely harsh on MSMEs. They are encountering lack of cash-flows to meet their fixed cost. Since MSMEs operate on very less margins, this unforeseen adversity is leading them towards closure. Managing salaries, utility costs, rents and EMIs is coming across as a challenge, which most MSMEs and SMEs seem to have succumbed to.
The govt of India has taken various steps for the protection of MSMEs. Read about those here.
However, there is still a need to have a stimulus to rehabilitate all entrepreneurial sects of the economy. Thus, to share the views and advice MSMEs on how to cope in this tough time, SOLV and FICCI jointly organised a webinar and brought together various key stakeholders from the financial ecosystem.
Mr. Nitin Mittal – CEO, SOLV (a Standard Chartered Group Company)
Ms. Rachna Bhusari – Vice President, National Stock Exchange of India Limited
Dr SS Acharya – General Manager, SIDBI(Small Industries Development Bank of India)
Mr. Ravindra Mishra- AGM, MSME, State Bank of India
Mr. Hemant Seth – Director, FICCI and Treasurer MSME
These industry leaders talked about the programs various govt organisations are running for the upliftment of MSMEs in this time of crisis.
Here are the top highlights of SOLV-FICCI Webinar on Meeting Financial Needs of MSMEs:
SOLV, a B2B platform for SMEs, in these difficult times of the coronavirus spread, is helping source and deliver essential supplies like food products, hygiene products and protective gear to NGOs, so that they can continue to serve their beneficiaries. SOLV’s wide network of suppliers and warehouses help ensure on time deliveries. SOLV is sourcing food products including groceries, fruits & vegetables; hygiene products like hand wash, sanitizers; and protective gear such as gloves, masks etc. NGOs can place bulk orders or ready-to-go packs for individual use and get delivery within 48-72 hours.
Additionally, SOLV has recently launched a COVID-19 Emergency Credit Line Program, wherein MSMEs can avail collateral-free short term working capital loans of up to ₹10 lakhs to help stabilise their business. MSMEs can apply here: https://bil.solvezy.com/registration/register.
Furthermore, if an MSME is involved in producing products to manage the current COVID scenario or are involved in distribution of products, SOLV will offer them the financing help. In addition to this, tax and compliance services can be availed via SOLV, wherein large consultants will digitally resolve compliance issues. SOLV will also assist MSMEs in digital marketing and packaging/branding.
b. Registering on the TReDS platform has been made mandatory for all traders. Any supplier that sells products to larger corporates can register and get his invoices financed from RXIL.
c. NSEIL is a SEBI regulated platform for growing companies that offers a banking funding mechanism – IPO. Companies can list on stock exchange, boost capital and grow company in a sustainable model. This platform is built specifically to help small business listed for IPO, and supports a company with a minimum turnover of ₹8 crore.
d. SIDBI is focussed on capacity building and development of MSMEs by creating an ecosystem for MSME funding. To help MSMEs dealing with the COVID situation, it is extending finance through its products – SIDBI assistance for emergency response to COVID (SAFE) and SAFE plus. Herein, MSMEs manufacturing PPE, producing medicines, healthcare supplies are given financial assistance of ₹50 lakhs under SAFE and up to ₹1 crore under SAFE plus within 48 hrs at an interest rate of 5% per annum. There is no processing fee, no collateral involved. It is covered under credit guarantee mechanism and SIDBI will bear credit guarantee charges. Additionally, for its own customers, SIDBI has introduced to meet immediate liquidity support requirement at 7.4% for 1 year, beyond which there will be a different interest rate.
RBI has also given assistance of ₹15000 crore to SIDBI to refinance the micro finance institutions so that they can meet the immediate finance requirements of MSMEs.
e. SBI has introduced an emergency credit line for its MSME customers. Those who have taken loans from SBI, 10% of their limit will be taken care of by SBI, so that MSMEs can use that amount to meet their expenses. All this will involve no further paperwork or security. Additionally, overdraft facility has been offered to avail money for rent, expenses or salaries, and the period for payment of dues has been extended.
You can watch the full webinar here: