Credit and finance for MSMEs: The government’s flagship credit support scheme of Rs 5 lakh crore for MSMEs, the Emergency Credit Line Guarantee Scheme (ECLGS) has sanctioned 1.19 crore loans (borrowers) involving Rs 3.58 lakh crore of which Rs 2.85 lakh crore loans have been disbursed as of November 30, 2022. Out of the total loans sanctioned, 95 per cent or 1.13 crore were sanctioned to MSMEs while out of the total amount sanctioned, 66 per cent or Rs 2.37 lakh crore belonged to MSMEs.
According to the data shared by the minister of state for MSMEs Bhanu Pratap Singh Verma in the Rajya Sabha in a written reply to a question on incentives under ECLGS, among MSME beneficiaries, small businesses were sanctioned maximum credit of Rs 90,846 crore across 5.51 lakh loans. In comparison, micro enterprises were sanctioned Rs 84,031 crore in credit even as the loan volume was 19 times higher at 1.05 crore – over 92 per cent of the 1.13 crore MSME loan volume, as of November end. On the other hand, medium enterprises had the lowest share. 2.69 lakh loans amounting to Rs 62,824 crore were sanctioned.
Also read: ECLGS: 57% of Rs 5 lakh cr disbursed till Nov; NPAs at 3.89%
States with the highest number of MSME beneficiaries under ECLGS since the beginning of the scheme in 2020 were Maharashtra with Rs 33,177 crore loans sanctioned followed by Tamil Nadu with Rs 26,47 crore loans sanctioned, Gujarat (Rs 23,793 crore), Uttar Pradesh (Rs 16,749 crore), Karnataka (Rs 15,700 crore), and more, as of November 30, 2022.
Meanwhile, according to a report by credit bureau TransUnion CIBIL in August this year, the ECLGS scheme not only helped MSMEs to revive and scale their business but also enabled them to start new trades. Over the course of four quarters since availing ECLGS, the average number of new trades opened per MSME borrower went up by 15 per cent compared to only 6 per cent for the eligible borrowers who didn’t avail of the credit scheme, the report noted.
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Among lenders, while public sector banks were early adopters in implementing ECLGS, private banks rapidly caught up. The contributions of public and private banks in terms of the amount disbursed were 42.8 per cent and 43.1 per cent respectively, while non-bank financial companies (9.4 per cent), small finance banks and rural regional banks (4.7 per cent) disbursed the remaining amount.
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