The Finance Ministry in a statement on Monday said that the Central Government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by one month till 30 November 2020 or till the assigned amount of Rs 3 lakh crore has been exhausted, whichever is earlier.
"The Union Government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by one month till November 30th, 2020, or till such time that an amount of Rs. 3 lakh crore is sanctioned under the Scheme, whichever is earlier, in view of the opening up of various sectors in the economy and the expected increase in demand during the ongoing festive season. This extension will provide a further opportunity to such borrowers who have not availed of the Scheme so far, to obtain credit under the Scheme," the statement said.
The ECLGS was announced by the finance ministry in May, as part of the Aatma Nirbhar Bharat Package (ANBP), to provide fully guaranteed and collateral-free additional credit to MSMEs (Micro, Small and Medium Enterprises), business enterprises, individual loans for business purposes and MUDRA borrowers, to the extent of 20 percent of their credit outstanding as on 29 February 2020. Borrowers with credit outstanding up to Rs. 50 crore as on 29 February 2020, and with an annual turnover of up to Rs 250 crore are eligible under the Scheme.
Interest rates under the Scheme have been capped at 9.25 percent for Banks and Financial Institutions, and 14 percent for NBFCs (non-banking financial companies). Tenor of loans provided under the Scheme is four years, including a moratorium of one year on principle repayment.