aatmanirbhar bharat abhiyan: PSOs disburse loans of Rs 3,893 million to MSMEs under emergency line of credit guarantee scheme

NEW DELHI: The Ministry of Finance said on Wednesday that Public Sector Banks (PSBs) disbursed Rs 3,892.78 crore in the first two days of the month under the Emergency Credit Line Guarantee Scheme of Rs 3 lakh crore (ECLGS) for the MSME sector hard hit by the coronavirus-induced lockdown.

Meanwhile, the PSBs sanctioned loans worth Rs 10,361.75 crore under the 100% ECLGS effective June 1.

The scheme is the largest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month.

“Public sector banks have already sanctioned loans worth Rs 10,361.75 crore under the 100% emergency line of credit guarantee scheme. rupees have already been disbursed,” Finance Minister Nirmala Sitharaman said in a tweet.

Micro, small and medium enterprises (MSMEs) are the backbone of the economy. “Under #AatmaNirbharBharat, Abhiyan Govt is committed to their growth. Contact @DFSforMSMEs for all questions regarding ECLGS/other measures and their prompt resolution,” said a tweet from the Department of Financial Services.

On May 21, the cabinet had approved additional financing of up to Rs 3 lakh crore at a concessional rate of 9.25% through the ECLGS for the MSME sector.

Under this scheme, 100% guarantee cover will be provided by the National Credit Guarantee Trustee Company (NCGTC) for supplementary financing of up to Rs 3 lakh crore to eligible MSMEs and interested Development Agency borrowers and refinancing of micro-units (MUDRA), in the form of a guaranteed emergency line of credit (GECL).

For this purpose, a corpus of Rs 41,600 crore has been provided by the government spread over the current financial year and the next three financial years.

The scheme would be applicable to all loans sanctioned under the GECL facility during the period from the date of announcement of the scheme until October 31 or until an amount of Rs 3 lakh crore is sanctioned under of GECL, whichever comes first.

The main objective of the program is to incentivize member lending institutions to increase access and enable the availability of additional financing facilities for MSME borrowers, given the economic distress caused by the COVID-19 crisis. , providing them with 100 percent guarantee for losses incurred by them as a result of non-repayment of GECL funding by borrowers.

All MSME borrower accounts with outstanding credit of up to Rs 25 crore as of February 29, which were less than or equal to 60 days overdue by that date, i.e. regular accounts, SMA- 0 and SMA-1, and with an annual turnover of up to Rs 100 crore, would be eligible for GECL funding under the scheme.