NEW DELHI: Banks have disbursed ₹56,091 crore as of 4 July out of ₹1.1 trillion loans sanctioned to small businesses under the emergency credit line guarantee scheme (ECLGS), finance minister Nirmala Sitharaman’s office said in a tweet on Tuesday. This translates into 49% of the credit already disbursed.
“As of 4 July 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by PSBs and private banks stands at ₹1,14,502.58 crore, of which ₹56,091.18 crore has already been disbursed," the tweet said.
Out of this, 16 private sector lenders have sanctioned ₹65,863.63 crore, out of which ₹35,757 crore has been disbursed. In case of the 12 state-owned banks, ₹20,515 or 42% of credit sanctioned has been disbursed.
ECLGS was announced as a part of the government’s ₹20 trillion financial package to help the poor and small businesses tide over the covid-19 crisis. This collateral-free loan is expected to enable small businesses to pay salaries, rent and restocking expenses.
The scheme provides an incentive to banks and non-bank lenders to offer additional funding facility to small borrowers by providing them 100% guarantee for any losses suffered by the lenders due to any default. The larger idea is to support small businesses struggling to meet their operational liabilities due to the imposition of a nationwide lockdown.