Credit and Finance for MSMEs: MSME Minister has often urged MSMEs to explore public markets instead of banks for their capital requirements wherein the government will buy 15 per cent of the amount raised as equity stake from the Fund of Funds.
Credit and Finance for MSMEs: MSME Ministry is looking to increase its Rs 10,000-crore Fund of Funds — announced last year to support small businesses looking to go public to raise capital — by 10X to Rs 1 lakh crore in three-four years. MSME Minister has often urged MSMEs, which have AAA credit rating, to explore public markets instead of banks for their capital requirements wherein the government will buy 15 per cent of the amount raised as equity stake from the Fund of Funds. For example, Rs 7.5 crore in equity will be purchased by the government if the MSME raises Rs 50 crore.
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“In three-four years when these shares are priced 3-4X more we will sell them and increase the amount to Rs 1 lakh crore,” said Gadkari in a video conference with the members of the Chartered Accountant Association of India on Sunday. For instance, if shares are offloaded in four years, priced at Rs 60 from Rs 10, the government will add Rs 50 to the fund.
Source: Financial Express
