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Good news for MSMEs: Emergency Credit Line Guarantee Scheme extended by one month

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New Delhi: In a bid to extend in demand throughout the ongoing festive season the federal government has prolonged the Emergency Credit Line Guarantee Scheme (ECLGS) by one month or until such time that an quantity of Rs 3 lakh crore is sanctioned below the Scheme (whichever is earlier).

“The Union Government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by one month till November 30th, 2020, or till such time that an amount of Rs. 3 lakh crore is sanctioned under the Scheme, whichever is earlier, in view of the opening up of various sectors in the economy and the expected increase in demand during the ongoing festive season. This extension will provide a further opportunity to such borrowers who have not availed of the Scheme so far, to obtain credit under the Scheme,” an official launch stated.

The ECLGS was introduced as a part of the Aatma Nirbhar Bharat Package (ANBP) to offer absolutely assured and collateral free extra credit score to MSMEs, enterprise enterprises, particular person loans for enterprise functions and MUDRA debtors, to the extent of 20 per cent of their credit score excellent as on February 29, 2020.

Borrowers with credit score excellent as much as Rs 50 crore as on February 29, 2020, and with an annual turnover of as much as Rs 250 crore are eligible below the Scheme.

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Interest charges below the Scheme are capped at 9.25 per cent for Banks and FIs, and 14 per cent for NBFCs. Tenor of loans supplied below the Scheme is 4 years, together with a moratorium of 1 12 months on precept reimbursement.

As per knowledge uploaded by Member Lending Institutions on the ECLGS portal, an quantity of Rs. 2.03 lakh crore has been sanctioned below the Scheme to 60.67 lakh debtors up to now, whereas an quantity of Rs. 1.48 lakh crore has been disbursed.

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