Credit and Finance for MSMEs: The Rs-4.5-lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS) announced last year by the government to support MSMEs and other businesses with their operational liabilities post Covid has sanctioned loans amounting to Rs 3.09 lakh crore as of December 10, 2021, according to the data by National Credit Guarantee Trustee Company (NCGTC). The guarantee coverage by NCGTC is provided to member lending institutions with respect to the credit given by them to MSMEs whose total credit outstanding across all lenders and days past due as of February 29, 2020, is up to Rs 50 crore and up to 60 days respectively.
The latest data on ECLGS sanctions was shared by MoS Finance Ministry Bhagwat Karad in a written reply to a question in Rajya Sabha. The sanctioned amount till December 10 was up from Rs 2.86 lakh crore loan sanctioned as of September 24, 2021, as per a Finance Ministry’s statement in September.
Importantly, the government had extended the scheme till March next year from September this year. This was the fifth extension since the scheme’s launch in May last year. From earlier extension till November last year, ECLGS was extended further to March 2021 followed by June and then September before another six-month extension along with subsequent expansion in scope as well to include more sectors and markets. Further, the last date of disbursement under the scheme was extended till June 30, 2022.
The total beneficiaries under the ECLGS scheme have been more than 1.25 crore. “Over around Rs 2.90 lakh crore loans have been sanctioned (under ECLGS). With this support, over 1.25 crore beneficiaries have strengthened their businesses. The majority of them are MSMEs,” Prime Minister Narendra Modi had said on November 12 at the virtual launch of the RBI Retail Direct Scheme and the Reserve Bank – Integrated Ombudsman Scheme.
However, according to a TransUnion Cibil report earlier this month, 57 per cent of ECLGS borrowers had said it wasn’t easy to avail the credit facility under the scheme. The study was based on sample data of loans amounting to Rs 1.45 lakh crore disbursed out of Rs 1.7 lakh crore in overall disbursement under ECLGS 1.0 and ECLGS 2.0 till March 2021.