This fund of funds may make downstream investments in venture capital and alternative investment funds that will, in turn, invest in MSMEs with AAA or AA-rated ratings.
The government is considering a proposal to create a Rs 10,000-crore fund to buy up to 15% equity in crisis-hit, but otherwise well-rated, MSMEs that will list on bourses, an official source told FE. The MSME ministry has submitted this plan with the finance ministry.
Separately, the Centre is also weighing another proposal to create a Rs 10,000-crore fund of funds for these small businesses, along the lines of the one meant for start-ups. This fund of funds may make downstream investments in venture capital and alternative investment funds that will, in turn, invest in MSMEs with AAA or AA-rated ratings.
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“Various ideas are being debated to help MSMEs tide over the pandemic impact. A decision will soon be announced,” said the source.
The National Small Industries Corporation under the MSME ministry or SIDBI may be tasked to control the funds.
Already, the MSME ministry is contemplating a scheme for credit rating to these businesses, based on their annual turnover, exports and GST payments.
Source: Financial Express
