SIDBI and GAME collaborate to boost the MSME sector

SIDBI and GAME have teamed up to help MSMEs address the longstanding gaps in the sector and mitigate the challenges brought by the pandemic.

June 28, 2021

Delayed payments for their services and inadequate credit for their goods and services are major challenges faced by the sector.

Expanding credit access, increasing formalisation of businesses, building competitive clusters and improving the legal framework are the key developments from the MoU.

It will work towards establishing Udyam Registration as a unique ID for enterprises to access schemes across sectors.

Additionally, projects working towards the development of financial innovations for the sector will be supported by the partnership.

With the aim of aiding the Micro, Small and Medium Enterprises (MSMEs) address the issues brought by the Covid-19 pandemic along with prevailing capacity gaps in the sector, the Small Industries Development Bank of India (SIDBI) and the Global Alliance for Mass Entrepreneurship (GAME) have formed a collaboration by means of a Memorandum of Understanding (MoU). 

As a key to a balanced and flourishing economy, MSMEs provide an ample number of components, including intermediate goods and services to large original equipment manufacturers and industry majors. When payments for their goods and services are delayed, it leads to the blocking of a large amount of working capital. Coupled with inadequate credit at a reasonable cost (a frequent occurrence), it leads to many businesses becoming financially unviable with no scope for further growth. With the second wave of Covid-19 and the subsequent lockdowns across the county, the situation became worse. Despite the announcement of emergency credit support measures and temporary relaxation of several compliance measures, the availability of adequate funds and the access to the same continued to remain a challenge. 

The aforementioned MoU will, thus, broadly look into expanding the credit access along with increasing formalisation of businesses, building competitive clusters and improving the legal framework for the ease of doing business. Special focus will be given towards establishment of Udyam Registration as a unique ID for an MSME to have access to schemes across all sectors and make maximum use of SIDBI’s financial schemes to further formalise enterprises, among others. Both the organisations also committed to ensuring that women entrepreneurs  shall account for at least 25 per cent of the beneficiaries of these measures.  Additionally, the partnership will also aid pilots that create financing innovations for the sector and collaborate on online and offline campaigns to align with the Swavalamban mission and mass entrepreneurship developmental projects of SIDBI.  Such partnerships aspire to identify, nurture and enable both youth and women to bolster their micro/small & medium enterprises to further serve the local community and the economy. Not only will this reduce urban migration but will make self-employment both aspirational and sustainable.