ECLGS for MSMEs: 24 lakh units benefitted so far out of targeted 45 lakh; disbursal stood at 37%

By: |
September 3, 2020 6:57 PM

Credit and Finance for MSMEs: FM Nirmala Sitharaman asked banks to roll out the debt resolution or recasting schemes by September 15 for Covid-related stress among businesses.

Finance Minister, Nirmala Sitharaman, tax charter, GST, GST cut, tax rateThe amount disbursed under ECLGS to MSMEs, as on September 3, 2020, was Rs 1.11 lakh crore.

Credit and Finance for MSMEs: Banks and non-banking financial companies (NBFCs) under Modi government’s Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) has disbursed credit to 24 lakh Covid-hit MSME accounts – 53 per cent of the targeted beneficiaries till date. The government had said that “45 lakh units can resume business activity and safeguard jobs” in its schemes for MSMEs announced as part of the Atmanirbhar Package in May this year. The amount disbursed, as on September 3, 2020, was Rs 1.11 lakh crore – 37 per cent of Rs 3 lakh crore in targeted disbursement. The data was tweeted by the Finance Ministry on Thursday following Nirmala Sitharaman’s meeting with the heads of banks and NBFCs to review the progress of schemes including partial credit guarantee and sub-ordinate debt apart from ECLGS.

Sitharaman also asked banks to roll out the debt resolution or recasting schemes by September 15 for Covid-related stress among businesses. The minister said that Covid related distress must not impact the lenders’ assessment of their creditworthiness as and when the moratorium on loan repayments is lifted. FM Sitharaman also focused on ensuring banks and NBFCs “immediately putting in place Board-approved policy for resolution, identifying eligible borrowers and reaching out to them.”

Also read: Piyush Goyal mulls platform with ‘like-minded’ nations for startups; calls Modi ‘real startup entrepreneur’

The Reserve Bank of India (RBI) had last month allowed lenders a one-time dispensation to restructure loans affected due to the pandemic. Companies and individuals with loan accounts in default for not beyond 30 days as on March 1, 2020, can apply for the one-time restructuring. FM Sitharaman had offered working capital support of 20 per cent of the outstanding credit for MSMEs as on February 29, 2020. MSMEs are required up to Rs 25 crore outstanding and turnover of up to Rs 100 crore. The operational guidelines for the ECLGS scheme were issued by the Department of Financial Services on May 23 following the approval from the Cabinet on May 20, 2020. The ECLGS Fund was registered on May 26, 2020.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Trai drops probe against Vodafone Idea on priority plan issue after telco tweaks offer
2Steel ministry moots Rs 3,346-crore aid to up domestic output
3International arbitration: Vodafone wins Rs 22,000-crore retrospective case against tax department