New Delhi, March 31: The World Bank said on Tuesday it has signed a $500 million loan agreement with India to improve fincial access for the country’s small-scale business enterprises in the manufacturing and services domain. “Lack of adequate fince is one of the biggest challenges facing the MSME (Micro, Small and Medium Enterprises) sector. Fincial institutions have limited their exposure to the sector due to a higher risk perception, information asymmetry, high transaction costs and lack of collateral,” the World Bank said in a statement.
According to the global fincier, the MSME census of 2006-07 estimated that about 87 percent of MSMEs did not have any access to fince and credit towards this segment accounted for only 13-15 percent of institutiolised credit.
According to the World Bank, the MSMEs account for over 80 percent of total industrial enterprises producing over 8,000 value-added products and employ an estimated 60 million people in India. (IANS)