Tribune News Service
New Delhi, September 29
The Finance Ministry has expanded the scope of the Rs 4.5 lakh crore collateral-free Emergency Credit Line Guarantee Scheme (ECLGS) to support micro, small and medium enterprises facing liquidity issues due to the pandemic.
The validity of the scheme has also been extended by another six months till March 31, 2022, and borrowers under its previous two editions will be allowed to borrow again.
The intention is to provide “much-needed support” to all the ECLGS borrowers (which mainly consist of MSME units) in time for the festival season,” said a Finance Ministry statement. As of September 24, Rs 2.86 lakh crore worth of loans were sanctioned under the scheme.
“The government has been receiving demands from various industry bodies and other stakeholders to extend the scheme to ensure continued support to eligible sectors/businesses,” said a Finance Ministry statement. “With a view to support various businesses impacted by the second wave of the pandemic, it has been decided to extend the timeline of 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,” it added.
The last date of disbursement under the scheme has accordingly been extended to June 30, 2022.
Under the modifications in the scheme, existing borrowers would be eligible for additional credit support of up to 10% of total outstanding credit. Businesses that have not availed assistance can get credit support of up to 30% of their outstanding credit. Businesses in specified sectors which have previously not availed ECLGS can get an even higher 40% of their credit outstanding.
The scheme was launched in May last year and has been availed of by over 1.15 crore MSMEs and businesses to meet operational liabilities and restart businesses after the pandemic-induced disruption.
Existing borrowers also eligible
- As of September 24, loans worth Rs2.86 lakh crore have been sanctioned under the scheme
- The last date of disbursement under the scheme has accordingly been extended to June 30
- Existing borrowers will also be eligible for additional credit support of up to 10% of total outstanding credit
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