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Centre may reach out directly to West Bengal MSMEs to provide assistance under ECLGS

Updated: Jul 01, 2020 11:06:58am

Kolkata, Jul 1 (KNN) Slamming West Bengal Chief Minister Mamata Banerjee for criticising Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, MoS for Heavy Industries and Public Enterprises Arjun Ram Meghwal said that the center will directly get in touch with the MSME units and small businesses interested in availing loans.

While addressing a virtual rally organised by the Bengal BJP on Tuesday, Meghwal said, “Mamata Banerjee had criticised the scheme floated for the MSME sector. Despite the state government’s criticisms, small entrepreneurs are now availing such schemes under its flagship Atmanirbhar Bharat package.''

''The application can be processed online and the money can be disbursed to the beneficiary’s account,” he added.

According to estimates with the Union Finance Ministry, loans have been sanctioned for more than 1.5 lakh units in West Bengal, while nearly 45,000 units have been disbursed the money. Till June 26, the ministry estimated, Rs 1,149 crore have already been disbursed through public sector banks to units in Bengal out of a sanctioned amount of Rs 2,790 crore.

Last month, Finance Minister Nirmala Sitharaman had announced the ECLGS, for the hard-hit MSME sector, which is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package.

On May 21, the cabinet had approved funding of up to Rs 3 lakh crore at a concessional rate of 9.25 percent through ECLGS for the MSME sector.

Under the Scheme, 100% guarantee coverage to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested MUDRA. borrowers, in the form of a Guaranteed Emergency Credit Line (GECL) facility.

The government will also provide a corpus of Rs 41,600 crore for the scheme over the current and coming three financial years.

''The main objective of the Scheme is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and Non-Banking Financial Companies (NBFCs) to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers,'' the government had said.

'The collateral free loans are for those with Rs 25 crore outstanding loan or Rs 100 crore turnover. The tenure of the loan will be 4-year and moratorium of 12 months,' said Finance Minister Nirmala Sitharaman.


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