Rs 14,690 Crore disbursed under Emergency Credit Line Guarantee Scheme
On June 12, 2020, the Ministry of Finance announced that the public sector banks have so far disbursed Rs 14,690 crores for the MSMEs under the Emergency Credit Line Guarantee Scheme (ECLGS).
The credit line of ECLGS is the biggest component of the economic package announced by the Finance Minister under Atma Nirbhar Bharat Abhiyan. The Finance Minister announced that Rs 29,490 crores of loans has been sanctioned to MSMEs. Out of this, Rs 14,690 crores has been disbursed.
The Cabinet in May 2020, had approved additional funding of Rs 3 lakh crores through ECLGS at a concessional rate of 9.25% for the MSME sector. This will help to cover MUDRA borrowers broadly.
The main aim of GoI to focus on ECLGS is to provide incentive to the lending institutions, enable availability of funding to the MSME borrowers and to increase the access of funding facilities to the MSMEs.
Impacts of the Scheme
The scheme is expected to mitigate stress caused by COVID-19 that has severely impacted manufacturing sector and other activities of MSME. It is expected to provide credit facilities at low cost and thereby help the MSMEs restart their business and meet their operational liabilities. The scheme is expected to have positive impact on the economy and also support its revival.