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 or issued 1,19,27,348 loans (borrowers) involving Rs 3,60,539 crore as of December 31, 2022, as per data from the National Credit Guarantee Trustee Company (NCGTC) which provides guarantee coverage to member lending institutions under the scheme.
According to the data shared by Minister of State for MSMEs Bhanu Pratap Singh Verma in a written response to a question in the Lok Sabha on February 2, maximum loans — 95,41,572 involving Rs 2,36,999 crore were issued in FY21 — the launch year of the scheme while in FY22, 23,00,424 loans involving Rs 99,377 crore were issued. In FY23 till December-end, 85,352 loans involving Rs 24,162 crore were sanctioned.
While Verma didn’t share the latest data on disbursements in his response, Rs 2.85 lakh crore loans were disbursed to MSMEs and other businesses as of November 30, 2022, under ECLGS. Sharing data in the Rajya Sabha during the winter session of the Parliament last year, Verma noted that 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.
States with the highest number of ECLGS loans sanctioned in FY23 till December-end were Andhra Pradesh (1.90 lakh), Uttar Pradesh (91,908), Rajasthan (50,055), Maharashtra (45,269), and Tamil Nadu (Rs 43,312).
Meanwhile, a report by the State Bank of India in January highlighted the role played by ECLGS in supporting MSMEs post-Covid period. The report noted that the scheme was able to save at least 14.6 lakh MSME loan accounts. Out of the 14.6 lakh MSMEs saved due to the ECLGS scheme since its launch in May 2020, almost 93.8 per cent were micro and small enterprises, the report authored by SBI’s Group Chief Economic Adviser Soumya Kanti Ghosh said.
In terms of asset quality, MSME accounts in absolute terms worth Rs 2.2 lakh crore improved since the inception of ECLGS for the entire banking industry which means that around 12 per cent of the outstanding MSME credit was saved from slipping into the NPA category because of the ECLGS scheme, said Ghosh analysing the data.
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