CII sets up fund for MSMEs to tackle Covid-19
   Date :27-Mar-2020

CII _1  H x W:
 
 
Business Bureau ;
 
The Confederation of Indian Industry (CII) has announced setting up of a CII Covid Rehabilitation and Relief Fund (CRR) to assist small enterprises or MSME in rehabilitation. This decision was taken by CII Forum on Covid-19 which is leading industry response measures to the coronavirus pandemic. Following widespread discussions with MSME members across the country, specific measures have been suggested by CII to curtail the impact of coronavirus on the MSME sector.
 
“Multiple actions need to be taken on extension of bank loans, a special fund, steps regarding filing of GST and improving welfare of workers. CII stands ready to support MSME sector in this hour of need through the CII COVID Rehabilitation and Relief Fund,” said Shreekant Somany, Chairman of CII National Council on MSME. With MSME facing a cash crunch, CII requested for additional ad-hoc sanction of working capital to the tune of 25% of sanctioned limit as a relief measure.
 
It suggested deferment of EMIs and interest rate on working capital as well. Setting up of a special MSME Factoring Fund to enable MSMEs to discount their bills to approved retailers in 15 days and permit retailers to pay in 120 days would help in faster realisation, said CII. Creation of a corpus by the Govt to help MSMEs tide over the crisis would help them to pay wages, according to CII. Extension of NPA norms in genuine cases to 150 days from the present 90 days and if required by industry, ad-hoc limits to an extent of 25% of sanctioned limits may be allowed by banks on SOS basis to overcome temporary liquidity crunch, would also provide temporary relief, said CII. Measures for improving welfare of the MSME workers during the temporary shutdown period are required as well, said CII.
 
Some of these could include supporting laid off workers during the crisis period, handling the statutory compliance of compensating workers in case of shutdown and exploring insurance cover options through the ESIC, 90 days extension for payment of employer’s contribution of PF and ESIS, insurance cover or part financing wages for those laid off due to coronavirus through ESIC or Govt schemes, allowing of CSR funds to support payment of wages to laid off workers. Other measures such as, extension of period for declaring NPAs by MSMEs, allowing roll over of terms loans and implementation of moratorium on EMIs for industrial loans, allowing banks to extend credit limit for MSMEs by 20% at branch level could significantly ease liquidity, CII said.