The Central Government has issued the notifications for extensions of Emergency credit line guarantee scheme for MSME sector.
Let’s summaries the Notifications issued:-
The Central government has declared the notification to extend the Rs 3 lakh crore-Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector beyond October even though the sanctioned amount so far is just approximately 65 percent of the target.
Emergency Credit Line Guarantee Scheme
Emergency Credit Line Guarantee scheme is signified to render financial assistance to companies, primarily Micro, Small, and Medium Enterprises (MSMEs), modified by slowdown triggered by the corona-virus pandemic. The main purpose is to provide support to all those concerned and if there are no takers for the scheme, there is no necessity to extend the scheme even though there is some measure left.
Before August 1, the government extended the range of the Rs 3 lakh crore-scheme by growing the upper ceiling of loans outstanding and including several loans given to professionals like doctors, lawyers, and chartered accountants for business objectives under its ambit.
Now, the government declared Rs 3 lakh crore-economic aggregate in the wake of the corona-virus pandemic, the scheme was later tweaked to be made applicable for companies with an annual turnover of Rs 250 crore as against the earlier origin of Rs 100 crore.
Further Clarification for MSME
There is further clarification for the MSME sector. Some of the significant factors are –
- Under the new scheme of MSME, 100 percent guarantee coverage will be presented by the National Credit Guarantee Trustee Company (NCGTC) for further funding of up to Rs 3 trillion to eligible MSMEs.
- Also, must include in Micro Units Development and Refinance Agency (MUDRA) borrowers in the sort of a GECL fluency.
- The scheme will be suitable for all loans authorized under the GECL ability during the period from the date of information of the scheme to October 31 or till the amount of Rs 3 trillion is approved under GECL.
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