The cabinet approved an additional Rs.3,00,000 crores of funding to eligible Micro, Small and Medium Enterprises (MSME) and interested MUDRA borrowers by way of "Emergency Credit Line Guarantee Scheme" (ECLGS).
Under ECLGS, 100% guarantee to be provided by National Credit Guarantee Trustee Co Ltd (NCGTC) in the form of a Guarantee Emergency Credit Line (GECL) facility.
Why this scheme?
Given the pandemic situation, most of the MSMEs are facing difficult situations and many may require further credit to manage the expenses during the lockdown. To encourage the lending institutions like banks to extend additional credit facilities to MSMEs this scheme is announced.
The Scheme would be applicable to all loans sanctioned under GECL during the period from the date of announcement of the Scheme to 31.10.2020, or till an amount of Rs three lakh crore is sanctioned under the GECL, whichever is earlier.
Who are all eligible?
All MSME borrowers upto Rs.25 crores outstanding credit as of 29-Feb-2020, which are less than or equal to 60 days past due on that day AND with an annual turnover of upto Rs. 100 crores
Quantum
Additional loan upto 20% of entire outstanding credit (upto Rs.25 crores) on 29-Feb-2020 as
- Working capital term loan (in case of Bank or Financial Institution)
- Term loan (in case of NBFCs)
Four years with one year moratorium period of one year
Interest rate
Banks and Financial Institutions : Max 9.25%
NBFCs : Max 14.00%
For FAQs on this scheme, CLICK HERE
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