India Considers Proposal to Guarantee $39 Billion of Small-Business Loans
- Small firms will be allowed to borrow extra 20% of their limit
- India is said to plan a special fund to pay for any defaults
Stores and businesses stand shuttered on a deserted street during a partial lockdown imposed due to the coronavirus at a town in the Gautam Buddh Nagar district of Uttar Pradesh, India.
Photographer: Prashanth Vishwanathan/BloombergIndia is considering a proposal to guarantee as much as 3 trillion rupees ($39 billion) of loans to small businesses as part of a plan to restart Asia’s third-largest economy, which is reeling under the impact of a 40-day lockdown, people with knowledge of the matter said.
Under the proposal, small firms will be eligible to borrow an additional 20% of their credit limit, the people said, asking not to be identified as the discussions are private. The extra debt will be fully backed by Prime Minister Narendra Modi’s administration, the people said. The government will set up a special fund to pay for any defaults, they said.