Monday, June 14, 2021

Centre expands scope of Emergency Credit Line Guarantee Scheme to aid MSME sector amid disruption caused by 2nd wave of COVID-19

The Centre today further expanded the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) amid the economic disruption caused by the second wave of COVID-19 pandemic to aid Micro, Small and Medium Enterprises (MSMEs) sector. The ministry said, Under ‘ECLGS 4.0’, 100 percent guarantee cover will be extended to loans of up to two crore given to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants.

The finance ministry said, interest rate has been capped at 7.5 percent for the same. It said, Civil Aviation sector to be eligible under ECLGS 3.0. The ministry said, Validity of ECLGS extended to September 30 this year or till guarantees for an amount of 3 lakh crore rupees are issued. Disbursement under the scheme has been permitted up to December 31 this year. The current ceiling of 500 crore rupees of loan outstanding for eligibility under ‘ECLGS 3.0’ will be removed, subject to maximum additional ECLGS assistance to each borrower being limited to 40 percent or 200 crore rupees.

The modifications in ECLGS would enhance the utility and impact of ECLGS by providing additional support to MSMEs, safeguarding livelihoods and helping in seamless resumption of business activity. Our correspondent reports, these changes will further facilitate flow of institutional credit at reasonable terms.

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