Over 97% of ECLGS borrowers micro and small enterprises: Govt data

Credit and finance for MSMEs: 98.9 lakh ECLGS guarantees involving Rs 13,683 crore issued were up to Rs 1 lakh while only two guarantees were over Rs 100 crore.

Written by Sandeep Soni

February 23, 2023 18:33 IST

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The scheme is scheduled to expire in March 2023 after it was extended by a year in March 2022.

Credit and finance for MSMEs: The government’s emergency credit scheme for MSMEs and other businesses including self-employed, etc., Emergency Credit Line Guarantee Scheme (ECLGS) has supported 1.13 crore (number of guarantees issued) MSME borrowers involving Rs 2.39 lakh crore worth guarantee as of January 31, 2023, of which 1.10 crore borrowers (97.6 per cent) were micro and small enterprises, according to the government data. “This shows that majority of the businesses supported under ECLGS belong to micro and small category,” said Minister of State in the MSME ministry Bhanu Pratap Singh Verma.

Also read: ECLGS: 57% of Rs 5 lakh cr disbursed till Nov; NPAs at 3.89%

According to the data from the Department of Financial Services (DFS), Ministry of Finance, shared by Verma in the Parliament recently, 98.9 lakh guarantees involving Rs 13,683 crore issued were up to Rs 1 lakh while 9.34 lakh guarantees involving Rs 22,086 crore ranged between Rs 1 lakh and Rs 5 lakh. 2.13 lakh and 2.67 lakh guarantees issued were between Rs 5 lakh and Rs 10 lakh and Rs 10 lakh and Rs 1 crore respectively. Only 38,907 guarantees were over Rs 1 crore and 21 guarantees beyond Rs 50 crore while only two guarantees were over Rs 100 crore.

Importantly, a report by the State Bank of India in January this year had noted that ECLGS supported MSMEs post-Covid period. According to the report, at least 14.6 lakh MSMEs were saved from going out of business during Covid with credit under ECLGS, of which almost 93.8 per cent were micro and small enterprises.

Also read: ECLGS prevented Rs 2.2-trn MSME loans from turning into bad loans: SBI report

While the scheme is scheduled to expire in March 2023 after it was extended by a year in March 2022, the government may extend it further given that a significant amount is still left out of its Rs 5 lakh crore limit to be deployed among MSMEs.

According to media reports, banks and non-banking financial companies (NBFCs) had requested its extension in the FY24 budget announced earlier this month. However, there was no announcement related to ECLGS by finance minister Nirmala Sitharaman in her budget speech. Sitharaman had reportedly met lenders on February 22 to review the scheme.