Swavalamban Crisis Responsive Fund (SCRF) | UPSC
Historic Interventions made by the Central Government to Ensure Timely Payments to MSMEs
WHY IN NEWS:
MSME Ministry takes lead in helping the MSMEs get their dues
SYLLABUS COVERED: GS 3:MSME
SWAVALAMBAN CRISIS RESPONSIVE FUND
- MSME sector has been adversely affected due to the ongoing Covid-19 pandemic.
- The Bank has since set-up the captioned fund to support free onboarding of the MSMEs on the Trade Receivables Discounting System (TReDS) Platform.
- To address the financing related issues faced by MSMEs in India, RBI in 2014 introduced the concept of TReDS.
SCRF funds are valid upto March 31, 2021.
BENEFITS TO THE MSME’s
- Enables MSME suppliers to get quick access to low-cost finance
- Without Recourse
- Collateral Free
- Quick Payments
- Lower Cost of Funds
- TReDS is an institutional mechanism set up in order to facilitate the trade receivable financing of MSMEs from corporate buyers through multiple financiers.
- It is an answer to the cash flow issues of the MSMEs in India.
- TReDS gives effective solution to enable MSME to take the next growth leap & reap emerging opportunities.
- For the ease of business of MSMEs, Ministry’s portal for new registration of Udyam is being integrated with TReDS and GeM in a seamless manner.
- Therefore, it would be just enough and useful to register as MSME on the Government portal.
- Integration with TReDS and GeM mechanisms will happen automatically.
- It is also paperless and fully based on self-declaration.
- No proof or documents are required.
- As on 1st September, close to 4.00 lakh registrations have already taken place since the new system was launched in July.
- To help the MSMEs in this long standing problem, Government of India has taken a series of measures recently.
- AtmaNirbhar Bharat package, had announced that Government entities should make such payments within 45 days.
- Active follow up is being done with the State Governments for payment and regular reports.