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Modi govt’s MSME credit scheme jumps over 1300% in disbursement; supported this many Covid-hit firms

Credit and Finance for MSMEs Public sector banks had a majority share of Rs 35,578.48 crore in the amount disbursed and Rs 65,863.63 crore in the amount sanctioned as of July 4 to Covid-hit MSMEs.

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Credit and Finance for MSMEs: The Narendra Modi government’s Rs 3 lakh crore collateral-free scheme called Emergency Credit Line Guarantee Scheme has ramped up support to Covid-hit MSMEs. The amount disbursed has jumped from Rs 45,860 crore as of June 26 to Rs 56,091.18 crore as of July 4, according to the data shared by Finance minister Nirmala Sitharaman’s office on Tuesday. This is 1,341 per cent up from Rs 3,892 crore disbursed as of June 1. Public sector banks had a majority share of Rs 35,578.48 crore in the amount disbursed and Rs 65,863.63 crore in the amount sanctioned as of July 4, as per the data tweeted by Sitharaman’s office. The rest was contributed by private sector banks. The amount was disbursed to 15,24,691 MSME accounts out of the sanctioned 36,28,444 accounts.

The top public sector banks lending to MSMEs under the scheme were State Bank of India (Rs 13,405.15 crore), Canara Bank (Rs 4,575.58 crore), Union Bank of India (Rs 3,359.52 crore), Bank of Baroda (Rs 3,344.01 crore), Punjab National Bank (Rs 2,595.22 crore) etc. The credit given to MSMEs impacted due to Covid pandemic is part of Rs 20 lakh crore stimulus package announced by PM Modi under the Aatmanirbhar Bharat campaign. The government had also launched the subordinate debt scheme last scheme to offer Rs 20,000 crore guarantee cover to 2 lakh MSMEs. The scheme was introduced to help distressed MSME accounts or NPAs as on April 30, 2020.

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Meanwhile, Finance Minister on Monday said that it has signed an agreement with the World Bank for loans worth $750 million to close to 1.5 lakh Covid-hit MSMEs under the MSME Emergency Response Programme.  The World Bank has committed $2.75 billion so far to help India fight Covid, including for the new MSME project. The first tranche of $1 billion emergency support was announced in April this year for health sector followed by $1-billion project approved in May to boost cash transfers and food benefits to the poor and vulnerable.

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