Credit and financing for MSMEs: The Emergency Line of Credit Guarantee Program (ECLGS), which was launched in May 2020 as part of the Atmanirbhar Bharat campaign to deal with the liquidity crisis of existing MSME borrowers affected by Covid, has helped sanction 60.6% of the program limit of Rs 4.5 lakh crore. As of July 2, 2021, Rs 2.73 lakh crore of loans have been sanctioned, of which Rs 2.14 lakh crore have been disbursed by partner banks and NBFCs. In addition, guarantees have already been issued for loans made to around 1.09 million MSMEs, according to the Ministry of Financial Services. The information was shared by the new MSME Minister Narayan Tatu Rane in a written response to a question from Rajya Sabha on Monday.
The government announced last month the increase in the overall ceiling of the eligible guarantee from Rs 1.5 lakh crore from Rs 3 lakh crore when the program was launched last year to Rs 4.5 lakh crore. The ECLGS has already been revised four times to broaden its scope and benefit MSMEs and other borrowers based on various industry recommendations. For example, MSME units, business enterprises, Mudra borrowers and individual business loans with an outstanding loan of up to Rs 50 crore and overdue days up to 60 days as of February 29, 2020 were eligible. under ECGLS 1.0. The scope has been expanded under ECLGS 2.0 with the inclusion of borrowers in 26 stressed sectors identified by the Kamath committee and the health sector and having an outstanding loan exceeding Rs 50 crore and up to Rs 500 crore and days late up to 60 days from February 29, 2020.
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Under ECLGS 3.0, the government had further included borrowers in the hospitality, travel and tourism, recreation and sports, and civil aviation sectors. Likewise, under ECLGS 4.0, hospitals, nursing homes, clinics, medical schools or units specializing in the manufacture of liquid oxygen, oxygen cylinders, etc. 31 2021, have also been included.
The program has been extended several times from October of last year to November, followed by March 2021, June 2021 and currently until September 2021, or until guarantees for the amount are issued under of the fourth program revision called ECLGS 4.0. The minister said on June 28, 2021 that the government had disbursed Rs 2.69 lakh crore for 1.1 crore units by 12 public sector banks, 25 private sector banks and 31 non-bank financial companies.