Govt extends Emergency Credit Line Guarantee Scheme till March 31, 2022 – BusinessToday

Clipped from: https://www.businesstoday.in/latest/economy/story/govt-extends-emergency-credit-line-guarantee-scheme-till-march-31-2022-307995-2021-09-29

Last date of disbursement under the scheme extended to June 30, 2022; the move follows demands raised by entities seeking extension of support of this scheme

The last date of disbursement under the scheme has also been extended to June 30, 2022, a Finance Ministry statement said.The last date of disbursement under the scheme has also been extended to June 30, 2022, a Finance Ministry statement said.

To extend support to the Micro, Small and Medium Enterprises (MSMEs) sector ravaged by COVID-19, the government on Wednesday extended the Emergency Credit Line Guarantee Scheme (ECLGS) till March 31, 2022, or till guarantees for an amount of Rs 4.5 lakh crore are issued under the scheme.

The last date of disbursement under the scheme has also been extended to June 30, 2022, a Finance Ministry statement said.

The move follows various demands raised by different entities seeking the extension of the support of this scheme. “The government has been receiving demands from various industry bodies and other stakeholders to extend the scheme to ensure continued support to eligible sectors/businesses,” the ministry said.

A slew of modifications has been made in the scheme to support businesses that bore the brunt of the devastating second wave of the pandemic. Now, existing borrowers under ECLGS 1.0 and 2.0 would be eligible for additional credit support of up to 10 per cent of total credit outstanding as of February 29, 2020, or March 31, 2021, whichever is higher.

Further, businesses that have not yet availed any sort of assistance under ECLGS 1.0 or 2.0, will be eligible to avail credit support to the tune of up to 30 per cent for their credit outstanding as of March 31, 2021.

On the other hand, businesses in sectors specified under ECLGS 3.0, who have previously not availed ECLGS, can avail credit support up to 40 per cent of their credit outstanding as of March 31, 2021, to the maximum of Rs 200 crore per borrower.

The statement also said that incremental credit can be availed within these limits by existing ECLGS borrowers whose eligibility increased because of a change in the cut-off date to March 31, 2021, from February 29, 2020. Also, borrowers who have availed assistance under ECLGS and whose credit outstanding as on March 31, 2021 (excluding support under ECLGS) is higher than that on February 29, 2020, will be eligible for incremental support in the cap stipulated under ECLGS 1.0, 2.0 or 3.0.

ECLGS was launched in May 2020 as a part of the government’s Rs 20 lakh crore relief package to help MSMEs amid Covid-19.  Since then, it has extended support to over 1.15 crore MSMEs. “As of September 24, 2021, loans sanctioned have crossed Rs 2.86 lakh crore under the scheme,” the ministry said.


Edited by Akashdeep Baruah

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