ENA Economy 2020-05-20 11:18:21 <p><strong>New Delhi, May 20 (KNN)</strong> The union cabinet on Wednesday cleared Rs 3 lakh crore to Micro, Small and Medium Enterprise (MSME) and interested MUDRA borrowers by way of Emergency Credit Line Guarantee Scheme (ECLGS).</p> <p>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 said in a statement.</p> <p>The government will provide a corpus of Rs 41,600 crore for the scheme over the current and coming three financial years.</p> <p>''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 statement added.</p> <p>Finance Minister Nirmala Sitharaman last week had announced Rs 3 lakh crore collateral free loan for MSMEs.</p> <p>'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,' FM had said at a press conference.</p> <p>The Finance Minister also announced 100% credit guarantee cover to banks and Non-Banking Financial Corporation (NBFCs) on principal and interest which will benefit 45 lakh units.</p> <p>Sitharaman further said that the government will create a Fund of Fund to infuse Rs 50,000 crore as equity for MSMEs which are viable businesses and need hand holding.</p> <p>She also asserted that in order to provide stressed MSMEs with equity support; government will facilitate the provision of Rs. 20,000 crores as subordinate debt.</p> <p> This will enable 45 lakh MSME units to resume business activity and also safeguard jobs, she added.</p> <p><iframe frameborder="0" height="500" id="mgiframe" src="//mg.mgid.com/mghtml/framehtml/c/k/n/knnindia.co.in.338951.html" width="100%"></iframe></p> 25095 https://knnindia.co.in/news/newsdetails/economy/cabinet-approves-rs-3-lakh-crore-funding-for-msmes 2020-05-20 11:18:21 knnindia.co.in