Monday, 30th October 2017

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Government plans export prop for SMEs

Aim is to create a sustainable ecosystem for MSME development with special schemes and easy financing

  • Published 26.12.18, 12:35 AM
  • Updated 26.12.18, 12:35 AM
  • a min read
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There is a proposal to set up an export credit hedge fund to be run through private fund manager(s) for grant of export credit to the MSME exporters. It will be a professionally managed fund, which will be used to diversify and manage the risks associated with export credit (Shutterstock)

The government is planning an exclusive promotion scheme for micro, small and medium enterprises, besides an export credit hedge fund and a governing council to ensure the sector gets the benefits of different schemes and the firms achieve the target of $100 billion shipments by 2020.

“MSMEs are often faced with challenges that restrict their entry into the foreign market. Not only do these challenges need to be studied in details but an ecosystem also needs to be created in such a way that these enterprises are able to participate in the global value chain on their own and generate enough economies of scale,” a strategic action plan, titled Unlocking the Potential of MSME Exports, prepared by the MSME ministry said.

The action plan aims to create a sustainable ecosystem for MSME development, including special schemes for the sector, interest subvention for easy financing and steps to scout for new markets.

There is a proposal to set up an export credit hedge fund to be run through private fund manager(s) for grant of export credit to the MSME exporters. It will be a professionally managed fund, which will be used to diversify and manage the risks associated with export credit.

The report said credit demand as on March 31, 2018, of the MSME sector is estimated to be $370 billion against the supply of $139 billion, resulting in a finance gap of $231 billion.

A study will be conducted of the special economic zones and export promotion zones in the country to reassess their role and objectives as these are an essential constituent of the Foreign Trade Policy and important to harness their potential.

Moreover, a tech-enabled online portal shall be developed featuring a country-wise list of global products and services in demand and information on how to enter the specific foreign markets. It will also have details on the loans and credit offered by various financial institutions.