MSMEs grapple with stress even as govt grants more time for restructuring

Muted demand, non-payment by large customers, and unwillingness on the part of banks to restructure loans takes a toll on the sector

With Micro, Small and Medium Enterprises (MSMEs) grappling with the problem of delayed payments and slowdown in demand, the sector remains under major stress, even as the government has extended the restructuring deadline by a year.

According to both, banks and MSMEs, repayments have been delayed by more than a month in a large number of cases. Some firms have even delayed by up to 120 days. Banks are required to tag an account as a non-performing asset if the loan has not been serviced for more than 90 days.

“Delayed payment is a major concern in the MSME segment. Also, MSMEs