FISME seeks SME Growth Fund support for stressed MSMEs with loan defaults

The Federation of Indian Micro and Small & Medium Enterprises (FISME) has advocated for broadening the scope of the government's ₹10,000-crore SME Growth Fund to include micro and small enterprises facing financial difficulties.

In its appeal, FISME has recommended that the fund should support businesses with SMA-2 (Special Mention Account-2) or NPA (non-performing asset) designations on their loan accounts, conditional upon these enterprises presenting credible business revival strategies. This approach, the federation argues, would help rescue viable businesses from financial distress and support economic recovery in the MSME sector.

The proposal reflects growing concerns within the small business community regarding access to credit for enterprises that have fallen behind on loan repayments due to operational challenges or external economic pressures. By extending the fund's reach to stressed accounts with demonstrated recovery potential, FISME contends that policymakers can maximize the social and economic impact of the government's support initiative.

The federation's recommendation underscores ongoing discussions about how targeted government interventions can balance prudent financial practices with the need to sustain India's vast MSME ecosystem, which employs millions and contributes significantly to manufacturing and employment generation across the country.