Disbursement of Rs 16,031 crore loan to MSME under ECLGS
In order to extend financial support to micro, small and medium enterprises (MSME) in the wake of COVID-19, the government had announced Rs 3 lakh crore under Emergency Credit Line Guarantee Scheme (ECLGS). The scheme was announced on May 13 as a part of the first tranche of Aatmanirbhar Bharat Abhiyan (Self-reliant India Initiative).
Reportedly, public sector banks disbursed Rs 16,031.39 crore till June 12, 2020 out of the total amount of Rs 3 lakh crore under Emergency Credit Line Guarantee Scheme (ECLGS). Public sector banks have also sanctioned loans worth Rs 32,049.86 crore under 100 per cent ECLGS for MSME sector starting June 1. It provides an additional working capital loan at a concessional rate of interest to an existing borrower, who is not a defaulter.
Union Cabinet had approved the additional funding scheme on May 21 at a concessional rate of 9.25 per cent for MSMEs and other small businesses. The scheme offers additional working capital equivalent to 20 per cent of the outstanding credit as on February 29, 2020 in the form of term loan to units with up to Rs 25 crore in outstanding credit and annual revenue of up to Rs 100 crore.