Public Sector Banks have disbursed a massive Rs 14,691 Crore Loan to MSMEs under the Emergency Credit Line Guarantee Scheme (ECLGS) to withstand the effect of economic dip due to the coronavirus-induced lockdown, the Finance Ministry said on Friday. Starting from June 1, a total of Rs 29,490.81 crore worth loan has been disbursed to MSMEs under the Rs 3 lakh crore ECLGS.
The scheme is the biggest chunk out of the enormous 20-lakh crore relief package under the Atmanirbhar Bharat Abhiyan announced by the Finance Minister last month.
“As of 11 June 2020, #PSBs have sanctioned loans worth Rs 29,490.81 crore under the 100% Emergency Credit Line Guarantee Scheme, out of which Rs 14,690.84 crore has already been disbursed,” Sitharaman said in a tweet.
At a concessional rate of 9.25%, the Cabinet had approved additional funding of up to Rs 3 lakh crore for loans to MSMEs through ECLGS on May 21.
This scheme ensured 100% guarantee coverage provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line facility.
The plan will apply to all loans endorsed under the GECL facility during the period from the date of declaration of the arrangement to October 31 or till an amount of Rs 3 lakh crore is authorized under GECL, whichever occurs first.
The principle goal of the plan is to give incentives to member lending institutions in order to expand access and empower accessibility of extra subsidizing facility to MSME borrowers, taking into account the financial misery brought about by the COVID-19 emergency and providing them with a 100 percent insurance against any misfortunes endured by them due to non-reimbursement of the GECL funding by borrowers.
All MSME borrower accounts with an outstanding credit of up to Rs 25 crore as on February 29, which were not exactly or equivalent to 60 days past due as on that date, ie, standard, SMA-0 and SMA-1 records, and with a yearly turnover of up to Rs 100 crore, would be qualified for GECL financing under the plan.