MSMEs recover less than 1% under Insolvency and Bankruptcy Code
Micro, small, and medium enterprises (MSMEs) are finding it nearly impossible to get their money back when companies go bankrupt under the Insolvency and Bankruptcy Code.
Since they're labeled as "operational creditors," basically suppliers or contractors, they don't get a say in key decisions and end up recovering less than 1% of what they're owed.
Supreme Court urges action on MSMEs
The Supreme Court has called out this unfairness, noting MSMEs are "significantly disenfranchised" and suggesting lawmakers step in.
Still, the Ministry of Corporate Affairs isn't moving forward with any fixes, despite pressure from the Ministry of Micro, Small, and Medium Enterprises and legal experts.
Many want India to follow global trends that give these businesses more rights and better chances at getting paid.