Indian SMEs could soon get loans from German and Canadian Banks Govt. in talks with foreign lenders for loans to MSMEs to overcome the 20-25 lakh crore estimated deficit in credit for the sector. As per a report in The Hindu, the Indian government is in talks with foreign lenders to provide $14.5 billion in credit to millions of MSMEs. Indian banks not in a position to provide enough capital to small businesses. Here is what we know so far:
1.The government is in discussions with multiple foreign lenders, including Germany’s state-owned development bank KfW Group. The KfW’s India office confirmed the discussions, and mentioned that the talks were at an early stage.
2.Solar power generation by small businesses could be a key focus area.
3.The government is also reportedly in discussions with the World Bank and some Canadian institutions to extend lines of credit to small enterprises.
4.The micro, small and medium enterprise (MSME) Ministry is discussing the proposal — to pull in foreign banks — with the Finance Ministry, which will make a final call.