Ahead of the festival season, the modification introduced aims to ensure that businesses especially MSMEs, who are adversely impacted by the second wave of COVID 2019 get enhanced collateral free liquidity.
Ahead of the festival season, the modification introduced aims to ensure that businesses especially MSMEs, who are adversely impacted by the second wave of COVID 2019 get enhanced collateral free liquidity.
New Delhi: In view of the demands from various Industry bodies and other stakeholders to extend the Emergency Credit Line Guarantee Scheme (ECLGS) to ensure continued support to eligible sectors/businesses during the pandemic, it has been has decided to extend the timeline of ECLGS till 31.03.2022 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 30.06. 2022, informed a release from the Ministry of Finance.
According to the release, since its launch, ECLGS 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 the COVID-19 pandemic.
As on 24th September 2021, loans sanctioned have crossed Rs. 2.86 lakh crore under the Scheme and out of total guarantees issued, about 95% of the guarantees issued are for loans sanctioned to MSMEs.
The following modifications have been made in the scheme to enable support to businesses impacted by the second wave of COVID:-
i. Existing borrowers under ECLGS 1.0 & 2.0 would be eligible for additional credit support of upto 10% of total credit outstanding as on 29.02.2020 or 31.03.2021, whichever is higher.
ii. Businesses who have not availed assistance under ECLGS (ECLGS 1.0 or 2.0), can avail credit support of upto 30% of their credit outstanding as on 31.03.2021.
iii. Businesses in sectors specified under ECLGS 3.0, who have previously not availed ECLGS, can avail credit support up to 40% of their credit outstanding as on 31.03.2021, to the maximum of Rs.200 crore per borrower;
iv. Incremental credit can be availed within these limits by existing ECLGS borrowers whose eligibility increased because of change in cut off date to 31.03.2021 from 29.02.2020.
v. Accordingly, borrowers who have availed assistance under ECLGS and whose credit outstanding as on 31.03.2021 (excluding support under ECLGS) is higher than that on 29.02.2020 shall be eligible for incremental support within the cap stipulated under ECLGS 1.0,2.0 or 3.0.