Emergency credit scheme extended until March next year
- ByManjeet Singh | September 30, 2021
It has been decided to keep the MSMEs urgent credit scheme in place until 31st March 2022. Furthermore, the Ministry of Finance has announced that disbursements under the scheme will be made through 30 June 2022.
On Wednesday, the Centre announced an extension of its Emergency Credit Line Guarantee Scheme (ECLGS) until 31 March 2022 or until guarantees for an amount of ₹4.5 lakh crore are issued under the scheme, whichever is earlier.
Various industry bodies and other stakeholders had asked the government to extend the scheme so that eligible sectors and businesses can continue to receive support.
The government has also made some modifications to the scheme for MSMEs. For existing borrowers, ECLGS 1.0 and 2.0 would provide additional credit support of up to 10% of outstanding credit as of 29.02.2020 or 31.03.2021, depending on which is higher.
In addition, businesses that have not been assisted by ECLGS (ECLGS 1.0 or 2.0) may receive credit support of 30% of their outstanding credit by 31.03.2021.
Companies in the sectors listed under ECLGS 3.0, which have not yet accessed ECLGS support, are eligible for credit support up to 40% of their outstanding credit as of 31.03.2021, up to a maximum of Rs.200 crore per borrower.
Existing ECLGS borrowers can avail of incremental credit within these limits if their eligibility was increased as a result of a change in cut-off date to 31.03.2021 from 29.02.2020. Therefore, borrowers who have received assistance under ECLGS and whose credit outstanding as of 31.03.2021 (excluding ECLGS assistance) is higher than 29.02.2020 shall be eligible for incremental support within the cap stipulated under ECLGS 1.0,2.0, or 3.0.
More than 1.15 crore Micro, Small and Medium Enterprises (MSMEs) and businesses have benefited from the Emergency Credit Line Guarantee Scheme (ECLGS) since its launch. In the wake of disruptions caused by the COVID-19 pandemic, it has helped eligible borrowers meet their operational liabilities and restart their businesses.
According to the latest data, the total amount of loans sanctioned under the scheme has exceeded Rs. 2.86 lakh crore and the vast majority (about 95%) of guarantees issued have been for loans sanctioned to Micro, Small, and Medium Enterprises.
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