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Union Cabinet has approved additional funding of up to Rs. three lakh crore through introduction of Emergency Credit Line Guarantee Scheme (ECLGS).
Guaranteed Emergency Credit Line (GECL) facility to help eligible Micro, Small and Medium Enterprise (MSME) borrowers, including interested MUDRA borrowers.
Cabinet also decided 100 per cent credit guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs).
For this purpose, a corpus of 41,600 crore rupees shall be provided by Government of India spread over the current and the next three financial years.
The Cabinet also approved that the Scheme would be applicable to all loans sanctioned under GECL Facility during the period from the date of announcement of the Scheme to 31.10.2020, or till an amount of three lakh crore is sanctioned under the GECL, whichever is earlier.
AIR correspondent reports, the Emergency Credit Line Guarantee Scheme (ECLGS) has been formulated as a specific response to the unprecedented situation caused by COVID-19 and the consequent lockdown, which has severely impacted manufacturing and other activities in the MSME sector.
The salient features of the scheme include all MSME borrower accounts with outstanding credit of up to Rs. 25 crore as on 29.2.2020 and with an annual turnover of up to Rs. 100 crore would be eligible for GECL funding under the scheme.
The scheme would be applicable to all loans sanctioned under GECL during the period from the date of announcement of the Scheme to 31.10.2020, or till an amount of Rs. three lakh crore is sanctioned under the GECL, whichever is earlier.
By supporting MSMEs to continue functioning during the current unprecedented situation, the scheme is also expected to have a positive impact on the economy and support its revival.