Credit and Finance for MSMEs: ECLGS was modified in September for borrowers under ECLGS 1.0 and 2.0 to make them 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.
In September, the government had announced another extension to the scheme till March 31, 2022. (Image: Pexels)
Credit and Finance for MSMEs: The Modi government’s Emergency Credit Line Guarantee Scheme (ECLGS) has so far sanctioned 64.4 per cent of the total scheme limit of Rs 4.5 lakh crore that was extended from Rs 3 lakh crore in June this year. The information was shared by Prime Minister Narendra Modi recently at a virtual event. This is up from over Rs 2.86 lakh crore loans sanctioned as of September 24, 2021, to over 1.15 crore borrowers. Also over 95 per cent of the guarantees under the scheme were for MSMEs, Finance Ministry had said in a statement in September.
Out of Rs 4.5 lakh crore, loans worth Rs 2.90 lakh crore were sanctioned so far. “Under the credit guarantee scheme (ECLGS), which was announced by the government, over around Rs 2.90 lakh crore loans have been sanctioned. With this support, over 1.25 crore beneficiaries have strengthened their businesses. The majority of them are MSMEs,” PM Modi said on November 12 at the virtual launch of the RBI Retail Direct Scheme and the Reserve Bank – Integrated Ombudsman Scheme. However, details on loans disbursed weren’t shared.
However, as of July 2, 2021, Rs 2.14 lakh crore loans were disbursed by partner banks and NBFCs, as per the information shared by the MSME Minister Narayan Rane in a written reply to a question in the Rajya Sabha.
In September, the government had announced another extension to the scheme by six months — till March 31, 2022, or till guarantees for the scheme limit of Rs 4.5 lakh crore are issued, whichever is earlier. This was the fifth extension given to the scheme since its launch in May last year. Originally announced till October last year, ECLGS was extended to November followed by March 2021, June and then September along with subsequent expansion in scope as well to include more sectors and markets.
ECLGS was also modified in September for borrowers under ECLGS 1.0 and 2.0 to make them 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. Moreover, businesses who have not availed assistance under ECLGS can avail credit support of up to 30 per cent of their credit outstanding as of March 31, 2021. The government also allowed enterprises in sectors specified under ECLGS 3.0, who have previously not availed ECLGS, to avail credit support up to 40 per cent of their credit outstanding as of March 31 to the maximum of Rs 200 crore per borrower.