Finance Minister Nirmala Sitharaman on Wednesday provided a major liquidity boost of Rs 75,000 crore to shadow lenders and microfinance institutions (MFIs), which are struggling with cash-flow problems as banks have become risk-averse in lending to them.
Sitharaman announced a special liquidity scheme of Rs 30,000 crore for non-banking finance companies (NBFCs), housing finance companies (HFCs) and MFIs, which are finding it difficult to raise money from the debt markets. Under this scheme, investment will be made in both primary and secondary market transactions in investment-grade debt papers of NBFCs, HFCs and MFIs. And, all the debt papers bought through this special liquidity scheme will be guaranteed by the government.
“This will provide liquidity support for NBFCs, HFCs, MFIs, and mutual funds and create confidence in the market”, the finance minister said.
“This will provide liquidity support for NBFCs, HFCs, MFIs, and mutual funds and create confidence in the market”, the finance minister said.
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