Credit and Finance for MSMEs: Emergency Credit Line Guarantee Scheme (ECLGS), which was launched in May 2020 as part of the Atmanirbhar Bharat campaign to address the liquidity crisis of Covid-hit existing MSME borrowers, has enabled sanctioning 60.6 per cent of the Rs 4.5 lakh crore scheme limit. As of July 2, 2021, Rs 2.73 lakh crore in loans was sanctioned, of which Rs 2.14 lakh crore was disbursed by partner banks and NBFCs. Moreover, guarantees have already been issued for loans granted to around 1.09 crore MSMEs, according to the Department of Financial Services. The information was shared by the new MSME Minister Narayan Tatu Rane in a written reply to a question in the Rajya Sabha on Monday.
The government had last month announced raising the overall cap of admissible guarantee by Rs 1.5 lakh crore from Rs 3 lakh crore at the time of the scheme’s launch last year to Rs 4.5 lakh crore. ECLGS has already been revised four times to enhance its scope and benefit MSMEs and other borrowers based on the various industry recommendations. For instance, MSME units, business enterprises, Mudra borrowers, and individual loans for business purpose having loan outstanding up to Rs 50 crore and days past due up to 60 days as on February 29, 2020 were eligible under ECLGS 1.0. The scope was enlarged under ECLGS 2.0 with the inclusion of borrowers in 26 stressed sectors identified by the Kamath Committee & the healthcare sector and having loan outstanding above Rs 50 crore and up to Rs 500 crore and days past due up to 60 days as of February 29, 2020.
Under ECLGS 3.0, the government had further included borrowers in hospitality, travel & tourism, leisure & sporting, and civil aviation sectors. Likewise, under ECLGS 4.0, existing hospitals, nursing homes, clinics, medical colleges or units engaged in manufacturing of liquid oxygen, oxygen cylinders, etc., and having credit facility with a lending institution with days past due up to 90 days as of March 31, 2021, were also included.
The scheme has been extended multiple times from October last year to November followed by March 2021, June 2021, and currently till September 2021, or till guarantees for the amount are issued under the fourth revision of the scheme dubbed ECLGS 4.0. The minister had said on June 28, 2021, that the government had disbursed Rs 2.69 lakh crore to 1.1 crore units by 12 public sector banks, 25 private sector banks, and 31 non-banking financial companies.