MSMEs may need massive restructuring post moratorium, says industry

Most small businesses have started opening up with Unlock 1.0 but continue to remain under stress due to lack of demand

Micro, small, and medium enterprises (MSMEs) might need large-scale restructuring in August once the moratorium on loan repayment is lifted, people in the industry have said. 

Most small businesses have started opening up with Unlock 1.0 but they continue to remain under stress due to lack of demand.

In March, the Reserve Bank of India (RBI) had launched three-month moratorium on loans, which was extended by another three months. Customers can now avail of moratorium till August, albeit at a higher cost on account of accrued interests.

“About 40-50 per cent of borrowers are availing of the moratorium and the stress is likely