Micro, small and medium enterprises staring at enduring financial distress

The RBI's guidelines on TReDS categorically state that an invoice has to be accepted by buyers before they can be financed by banks

Last week, the Parliamentary Standing Committee on Industry made a case for extending the repayment period under the Emergency Credit Line Guarantee Scheme (ECLGS) up to seven to eight years, from the current three to four years. The scheme was rolled out in May 2020 as part of a relief package for micro, small, medium and small enterprises (MSMEs) at a time when they were reeling from stress caused by the pandemic.

The committee’s announcement was not unexpected, for Finance Minister Nirmala Sitharaman had said so in her Budget speech — but this lifeline was to be alive only for another