New Delhi, Sep 29 (SocialNews.XYZ) The government has extended, till March 31, 2022, the Emergency Credit Line Guarantee Scheme (ECLGS) to support liquidity needs of small and medium businesses impacted by the second wave of Covid-19 pandemic.
Since its launch, the ECGLS has extended relief to over 1.15 crore micro, small, and medium enterprises (MSMEs) and businesses. It has provided support to eligible borrowers in meeting their operational liabilities and restarting their businesses in the wake of disruptions caused by Covid-19.
As on September 24, loans sanctioned under the scheme have crossed Rs 2.86 lakh crore, and out of total guarantees issued, about 95 per cent are for loans sanctioned to MSMEs.
"With a view to support various businesses impacted by the second wave of Covid-19 pandemic, it has been has decided to extend the timeline of Emergency Credit Line Guarantee Scheme (ECLGS) till March 31, 2022, or till guarantees for an amount of Rs 4.5 lakh crore are issued under the scheme, whichever is earlier. Further, the last date of disbursement under the scheme has also been extended to June 30, 2022," a Finance Ministry statement said.
The government had been receiving demands from various industry bodies and other stakeholders to extend the scheme to ensure continued support to eligible sectors and businesses.
The scheme operation has also been modified to maximise the beneficiaries under it. Accordingly, existing borrowers under ECLGS 1.0 and 2.0 would now be eligible for additional credit support of upto 10 per cent of total credit outstanding as on February 29, 2020 or March 31, 2021, whichever is higher.
Also, businesses, who have not availed assistance under ECLGS 1.0 or 2.0), can avail credit support of upto 30 per cent of their credit outstanding as on March 31, 2021. Businesses in sectors specified under ECLGS 3.0, who have previously not availed ECLGS, can avail credit support up to 40 per cent of their credit outstanding as on March 31, 2021, to the maximum of Rs 200 crore per borrower.
The government has also decided that incremental credit can be availed within these limits by existing ECLGS borrowers whose eligibility increased because of change in cut-off date to March 31, 2021 from February 29, 2020. Accordingly, borrowers who have availed assistance under the ECLGS and whose credit outstanding as on March 31, 2021 (excluding support under the ECLGS) is higher than that on February 29, 2020 shall be eligible for incremental support within the cap stipulated under the ECLGS 1.0,2.0, or 3.0.
The modification introduced would ensure that businesses adversely impacted by the second wave of Covid-2019 get enhanced collateral free liquidity. Further, this provides much needed support to all the ECLGS borrowers (which mainly consist of MSME units) in time for the busy/festival season, the statement said.
The revised operational guidelines in this regard are being issued separately by the National Credit Guarantee Trustee Company Ltd.
Source: IANS
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