Covid-19 hit MSMEs hard; credit availability, liquidity a challenge: Niti Aayog's Rajiv Kumar

The Covid-19 pandemic has hit MSMEs hard, which has resulted in inequitable growth, Niti Aayog vice-chairman Rajiv Kumar has said. Kumar, during a webinar on 'Sustainable Growth of MSMEs in the Aftermath of Covid-19' today, said credit availability and liquidity have been a challenge for micro, small and medium enterprises.

He said the Centre is working towards a transition to cash-flow based funding for SMEs. The switch from inventory-based credit to cash-flow based credit will help solve MSMEs' liquidity constraint and will cut down on funding turnaround time.

Rajiv Kumar said large companies have posted profits during the tough period of Covid-19, while MSMEs' earnings have been hit by 50% across segments.

The government think tank vice chairman said a large number of MSMEs in the contact-sensitive sectors have even folded up their businesses.

"MSMEs need utmost attention as their challenges are unmet to a large extent. The government is also trying its best to address their challenge," he added.

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