Credit and Finance for MSMEs: The extension will reduce the repayment burden on the enterprises as businesses are again facing headwinds, says FIEO President.
The Union Cabinet recently approved increasing the limit of the ECLGS scheme from Rs 4.5 lakh crore to Rs 5 lakh crore.
Credit and Finance for MSMEs: The apex trade promotion body Federation of Indian Export Organisations (FIEO)’s President A Sakthivel has requested the Government to consider extending the repayment period by one more year for ECLGS 1.0, 2.0, 3.0, and 4.0. The official said that the extension will reduce the repayment burden on the enterprises as businesses are again facing headwinds.
The Union Cabinet recently approved increasing the limit of the ECLGS scheme from Rs 4.5 lakh crore to Rs 5 lakh crore with an additional allocation of Rs 50,000 crore solely for hospitality and related sectors.
Reiterating the disruptions caused by the COVID-19 pandemic, Sakthivel thanked the government for the move as hospitality is among the worst victims of Covid, which is still struggling to regain ground.
He also said that the enhancement is expected to provide much-needed support to enterprises in these sectors by encouraging banks to provide additional credit of up to Rs 50,000 crore at a very competitive cost. Moreover, the additional support will help the enterprises to meet their operational liabilities and further their businesses.
Currently, the repayment period under the ECLGS scheme is of three-four years including the moratorium period.
Sakthivel said that the ECLGS Scheme has been extremely helpful to the industry by providing collateral-free credit, at a time when the quality of collateral has significantly deteriorated due to Covid.
Many of the units have survived the onslaught of Covid due to timely support extended under the ECLGS Scheme which the Government has extended till the end of the fiscal, said the statement.