The emergency credit line guarantee scheme (ECLGS), launched to help small businesses tide over Covid-19-related challenges, was most beneficial to very small enterprises whose total loan exposure was under Rs 10 lakh, TransUnion Cibil said on Thursday.
Of the total number of borrowers who availed of loans under the scheme, 58.5% belong to the very small category and 32% to the micro category, where loan exposures range between Rs 10 lakh and Rs 1 crore. In value terms, the share of the very small and micro segment was at 30% of the disbursed amount.
According to Cibil, the ECLGS has helped facilitate the resurgence of sectors that were severely affected by the pandemic. “COVID-19 and subsequent restrictions, because of their nature, are widely accepted to have had a higher impact on sectors like retail trade, wholesale trade, transport, professional services, tourism and hotels & restaurants that are heavily dependent on mobility,” the credit bureau said, adding that these sectors accounted for 75% of the total disbursements made under ECLGS 1.0 and ECLGS 2.0.
An analysis by the credit bureau showed that Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh and Karnataka accounted for 47% of the total ECLGS loan disbursement.
A report by Cibil showed stressed MSME borrowers – those with a Cibil rank ranging from 7 to 10 – had a better avail rate, compared to non-stressed borrowers. The avail rate is the number of borrowers taking ECLGS loans as a share of the total eligible base. “ECLGS loans have helped these borrowers come out of the crisis situation, as evidenced by score upgrades (movement from a higher risk bucket to a lower risk bucket) which were better for high risk borrowers who availed ECLGS facilities as compared to those who did not,” Cibil said.
The categories of very small and micro borrowers reduced their average balance by 33% after availing of the ECLGS facility, whereas the small and medium segments showed a balance decrease of 22% and 14%, respectively. For all segments, eligible borrowers who did not avail of the facility had a balance decrease of less than 10%.