What does loan restructuring mean for MSMEs: a lasting solution or just a band-aid for their everlasting distress? Entrepreneur examines.
Can micro, small and medium enterprises (MSMEs) be saved? Often called as the engine of growth, there are approximately 60 million MSMEs in the country, employing approximately 120 million people, which accounts for almost one in 10 Indians. But sadly, for the past few years, these enterprises have been facing a relentless economic decline. Industry wide estimates suggest that at least 35 lakh jobs have been lost since 2014, and the operating profits in the sector have declined by at least 30 percent — a corollary of the twin impact of demonetization and GST. Taking note of the distress, the political class in conjunction with the Reserve Bank of India (RBI), have been coming out with a series of remedial measures. One such measure was announced on January 1, 2019, allowing one-time restructuring of loans for up to Rs 25 crores for MSMEs. The move would allow financially strained MSMEs, which have defaulted on payments but are not yet categorized as stressed, to pay the outstanding loan in revised lower equated monthly installments (EMIs), spanning over a longer duration.
To assess the move, Entrepreneur spoke with various MSME owners and industry experts to gauge its likely impact on the sector and economy in general.
TO BE OR NOT TO BE
Bu hikaye Entrepreneur magazine dergisinin February 2019 sayısından alınmıştır.
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