FIDC welcomes special measures for nbfcs announced by FM on 13 05 20 FIDC wishes to thank the Hon'ble Finance Minister Mrs. Nirmala Sitharaman for announcing several measures to assist the NBFC sector.

FIDC has been over the past several years strongly advocating the case of asset-based lending NBFCs, especially the small and medium NBFCs and we are happy to note that the Government has recognised the contribution made by the sector in providing the last-mile financial assistance to under-served sectors such as small road transport operators, contractors, MSMEs and small farmers. FIDC has been requesting for four key measures announced by the Hon'ble Minister today which are:

Announcement of Rs 300,000 crores credit guarantee scheme whereby loans given to MSMEs by banks and NBFCs would be guaranteed by the Govt. This would enable NBFCs to provide more finance to MSMEs and at the same time raise loans from lenders on the strength of this portfolio of MSME loans.
Provision of Rs 30,000 crores for finance to NBFCs by way of subscription to investment grade NBFC bonds/CPs. FIDC has been requesting for a direct refinance mechanism for smaller NBFCs.
Provision of partial first loss guarantee of 20% enabling even unrated NBFCs to raise up to Rs 45,000 crores. FIDC believes that credit rating alone does not reflect the extent of last-mile connectivity and financial inclusion being done by NBFCs. We are pleased that the Govt. has recognised the role being played by smaller NBFCs.
Change in definition of MSMEs would have the effect of including many entities which hitherto were excluded from preferential treatment in credit availability. This would increase flow of credit to MSMEs where NBFCs are well placed to play a very active role.
FIDC supports the Government of India in its efforts to revive the economy and pledges to play a constructive and active role in the process.