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ECLGS Extended To Larger MSMEs And Professionals

By Staff
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On Saturday, Finance minister Nirmala Sitharaman allowed loans for larger MSMEs and professionals for business purposes within the ambit of Emergency Credit Line Guarantee Scheme (ECLGS).

The finance ministry has increased the annual turnover ceiling on companies that could avail loans under the scheme from Rs 100 crore at present to Rs 250 crore, in line with the new definition of medium and small, and micro enterprises (MSMEs). The maximum amount of loans that can be availed under the scheme has also been increased to Rs 10 crore from Rs 5 crore.

ECLGS Extended To Larger MSMEs And Professionals
 

Sitharaman said that the expansion of the scheme to include individual loans for working capital purposes and larger MSMEs is likely to boost credit offtake by Rs 1 lakh crore within the overall ceiling of Rs 3 lakh crore for the scheme. As of 29 July, Rs 1.4 lakh crore had been sanctioned under the scheme while Rs 87,227 crore worth of loans disbursed.

The ECLGS was announced by the government as part of its COVID-19 relief in May. Under the scheme, 100% collateral-free loans of up to Rs 3 lakh crore with a 100% guarantee will be provided to severely impacted MSMEs, by the National Credit Guarantee Trustee Company (NCGTC) through banks, NBFCs (non-banking finance companies) and Financial Institutions.

The 100% guarantee is provided by NCGTC to banks and NBFCs so that they can extend credit to businesses and MSMEs to meet their additional term loan/additional working capital requirements.

Read more about: msme msmes sme loans coronavirus
Story first published: Saturday, August 1, 2020, 15:17 [IST]
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