Delayed payments stall MSME sector’s revival after deep pandemic losses.

• A critical problem faced by Micro, Small and Medium Enterprises (MSME) sector is delayed payments.

Definition

The problem with the MSME sector

• Micro and small units have been hit hardest post-Covid with their pending dues almost 80% of total pending for entire MSME sector until 2021.
• Rise in delayed payments as percentage of sales has been lower for “medium” segment units.
• Government in 2020, asked both PSUs and top 500 companies to clear their dues to units in the sector.
• This was part of government’s plan to ensure enough liquidity for MSME units along with credit facility for the sector under Emergency Credit Line Guarantee Scheme (ECLGS) scheme.

Reasons for delayed payment

Prelims take away

• MSME Sector
• Emergency Credit Line Guarantee Scheme (ECLGS) scheme.