Govt expands ECGLS scheme for MSMEs; loan limit enhanced to 10 cr; professionals made eligible
New Delhi, Aug 2 (KNN) After the consultations with the industry stakeholders, Union Finance Minister Nirmala Sitharaman has tweaked and widened the scope of the Rs 3-lakh crore MSME credit guarantee scheme by doubling the upper ceiling of loans outstanding to Rs 50 crore.
The Minister also allowed loans for larger Micro, Small and Medium Enterprises (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 of companies that could avail loans under the scheme to Rs 250 crore from Rs 100 crore at present. The maximum amount of loans that can be availed under the scheme has also been increased to Rs 10 crore from Rs 5 crore.
Sitharaman also said that the intended changes are likely to expand the ambit of ECLGS to make an additional amount of more than Rs 1 lakh crore eligible under the scheme.
As of July 29, Banks have approved loans worth about Rs 1.37 lakh crore while disbursement stood at Rs 87,227 crore.
On May 20, the Cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector.
Under the scheme, 100 per cent guarantee coverage will be provided by the National Credit Guarantee Trustee Company for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency borrowers in the form of a guaranteed emergency credit line (GECL)facility.
For this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years.
The scheme will be applicable to all loans sanctioned under the GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.
All MSME borrower accounts with an outstanding credit of up to Rs 50 crore as on February 29, which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 250 crore, are eligible for GECL funding under the scheme.