World Bank and Government of India signed $750 million agreement for MSME Emergency Response Programme to enhance credit flow to micro, small, and medium enterprises. Programme targets improved access to finance, particularly post-COVID recovery support. Focuses on strengthening MSME ecosystem through institutional capacity building, digital financial services, and risk mitigation mechanisms. Part of India's broader financial inclusion strategy supporting economic recovery.

The $750 million World Bank-India MSME Emergency Response Programme addresses critical financing gaps in India's MSME sector, which contributes 30% to GDP and employs over 110 million people. Post-COVID, MSMEs faced severe liquidity constraints and reduced credit access, threatening economic recovery. This programme operates through multiple channels: direct lending support to financial institutions, capacity building for MSME lending, digital payment infrastructure enhancement, and risk-sharing mechanisms. The initiative aligns with India's Atmanirbhar Bharat vision, strengthening domestic manufacturing capabilities. It complements existing schemes like MUDRA, CGTMSE, and Emergency Credit Line Guarantee Scheme. The programme's significance lies in addressing structural issues - limited collateral, informal operations, and banks' risk aversion toward MSME lending. By providing institutional support and risk mitigation, it aims to formalize the MSME sector, improve credit discipline, and enhance their contribution to exports and employment generation.