Business News/ News / India/  ECLGS benefitted nearly 1.2 crore MSMEs, other businesses till Nov-end

New Delhi: The central government’s flagship credit scheme for MSMEs, Emergency Credit Line Guarantee Scheme (ECLGS), has benefitted around 1.19 crore businesses as of 30 November, Minister of State Finance Bhagwat Kishanrao Karad said on Monday.

Launched in May 2020, the scheme has sanctioned collateral-free loans amounting to 3.58 lakh crore till June-end.

In a written reply to a question in the Lok Sabha, the minister said, “As on 30.11.2022, guarantees amounting to 3.58 lakh crore have been issued under ECLGS, benefiting 1.19 crore borrowers."

The minister stated, 100% credit guarantee is extended to the lending institutions for loans extended by them under the scheme to eligible borrowers.

“The admissible guarantee limit under the scheme has been increased from Rs. 4.5 lakh crore to Rs. 5 lakh crore, with the additional guarantee cover of Rs. 50,000 crore earmarked exclusively for the Hospitality and related enterprises including Civil Aviation sector," he said.

Karad said that most of the MSME borrowers have loans outstanding up to Rs. 50 crore. For this category of borrowers, the ECLGS scheme was an ‘opt out’ scheme, i.e. eligible support was to be provided by the lenders to such category of eligible borrowers, unless the MSME borrowers decided not to avail the support or were ineligible. Thus, the scheme was so designed that it was easily accessible and available to the MSMEs.

ECLGS was launched as part of Aatmanirbhar Bharat Abhiyaan to support eligible Micro, Small and Medium Enterprises (MSMEs) and business enterprises in meeting their operational liabilities and restarting their businesses hit by the covid-19 pandemic.

The scheme provides 100% guarantee coverage from National Credit Guarantee Trustee Company Limited (NCGTC) to existing borrowers on the books of the banks. The scheme was launched with an initial admissible limit of the guarantee cover at 3 lakh crore which was later enhanced to 4.5 lakh crore and further to 5 lakh crore in the 2022-23 budget announcement.

In March this year, the government extended the validity of the scheme to March 31, 2023, or till guarantees for an amount of 5 lakh crore are issued.

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Updated: 12 Dec 2022, 05:22 PM IST
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