The government has extended the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) by one month till November 30th, 2020 due to opening-up of the economy and expected increase in demand during the ongoing festive season. The scheme is aimed at supporting businesses, primarily micro, small and medium enterprises (MSMEs) that have been impacted by the coronavirus-induced economic slowdown.
The Centre had announced ECLGS as part of the Rs 20.97 lakh crore Aatma Nirbhar Bharat Package (ANBP) to provide fully guaranteed and collateral free additional credit to MSMEs, business enterprises, individual loans for business purposes and MUDRA borrowers, to the extent of 20 per cent of their credit outstanding as on February 29, 2020.
Borrowers with credit outstanding up to Rs 50 crore as on February 29 and having an annual turnover of up to Rs 250 crore can avail the benefit of the scheme. Loans under the scheme are disbursed for four years, including a moratorium of one year on principle repayment, and interest rates are capped at 9.25 per cent for banks and FIs, and 14 per cent for NBFCs.
On August 1, the government had widened the scope of the Rs 3 lakh crore-scheme by including loans given to professionals such as doctors, lawyers and chartered accountants for business purposes under its ambit. It had also doubled the upper ceiling of credit outstanding amount to avail of the scheme, from Rs 25 crore to Rs 50 crore.
An amount of Rs 2.03 lakh crore has been sanctioned under the Scheme to 60.67 lakh borrowers so far and Rs 1.48 lakh crore has already been disbursed, as per data uploaded by member lending institutions on the ECLGS portal.