Credit and Finance for MSMEs: The scheme was launched by the Finance Minister Nirmala Sitharaman in May as part of the Rs 3.7 lakh crore package for MSMEs under the Rs 20 lakh crore economic stimulus.
Credit and Finance for MSMEs: In order to benefit individuals and more number of MSMEs under the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, the Ministry of Finance has expanded its scope. The government has increased the upper ceiling of loan outstanding, as on 29 February 2020, from earlier up to Rs 25 crore to Rs 50 crore now for more small businesses to raise credit. According to the eligibility guidelines, MSMEs can seek emergency credit from banks and NBFCs up to 20 per cent of their outstanding amount. Hence, with the new modification, borrowers will now be able to get credit up to Rs 10 crore, which is 20 per cent of Rs 50 crore, up from Rs 5 crore – 20 per cent of earlier Rs 25 crore.
The government has also increased the annual turnover ceiling to be eligible for the scheme from Rs 100 crore to Rs 250 crore “in line with the increased ceiling of loans outstanding, and the revised definition of MSMEs issued by the Ministry of MSME,” according to the notification sent by the state-owned National Credit Guarantee Trustee Company (NCGTC) to the heads of all scheduled commercial banks, financial institutions, and NBFCs.
“MSME Ministry thanks PM, FM and @FinMinIndia for expanding the scope of the ECLG scheme. The emergency credit facility will now cover Individuals & more enterprises,” MSME Ministry said tweeting the notification sent last week.
“We advise you to make best use of the modifications made and ensure maximum utilization under the scheme,” the notification signed by NCGTC CEO Durgesh Pandey read. NCGTC acts as a trustee for multiple credit guarantee funds.
The scheme was launched by Finance Minister Nirmala Sitharaman in May as part of the Rs 3.7 lakh crore package for MSMEs under the Rs 20 lakh crore economic stimulus announced. The scheme can be availed till October 31, 2020. According to the government, 45 lakh MSMEs impacted due to the Covid pandemic will be “able to resume business activity and safeguard jobs,” as per the presentation on Atmanirbhar Bharat campaign.