Public Sector Banks Disbursed MSME Loans Worth Rs 14690 Under ECLGS

Public Sector Banks (PSBs) have disbursed Rs 14,690.84 crore till June 11, under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector, hit hard by the coronavirus-induced lockdown, said Finance Ministry.

Taking to micro-blogging site twitter, the Finance Minister's office, on Friday, said that PSBs have sanctioned loans worth Rs 29,490.81 crore under the 100 per cent ECLGS for the Micro, Small & Medium Enterprises (MSME) sector starting June 1.

''As of 11 June 2020, #PSBs have sanctioned loans worth Rs 29,490.81 crore under the 100% Emergency Credit Line Guarantee Scheme, out of which Rs 14,690.84 crore has already been disbursed,'' Finance Minister office tweeted.

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

Last month, Finance Minister Nirmala Sitharaman had announced the ECLGS, for the hard-hit MSME sector, which is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package.

Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility.

The government will also provide a corpus of Rs 41,600 crore for the scheme over the current and coming three financial years.

'The main objective of the Scheme is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and Non-Banking Financial Companies (NBFCs) to increase access to, and enable the availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers,'' the government said.

'The collateral-free loans are for those with Rs 25 crore outstanding loan or Rs 100 crore turnover. The tenure of the loan will be 4-year and moratorium of 12 months,' said Finance Minister Nirmala Sitharaman.