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Emergency Credit Line Guarantee Scheme- Press Release

Emergency Credit Line Guarantee Scheme

Posted On: 05 AUG 2021 1:44PM by PIB Delhi

Emergency Credit Line Guarantee Scheme (ECLGS) was announced as part of the Atma Nirbhar Bharat Package in 2020 with the objective to help businesses including MSMEs to meet their operational liabilities and resume businesses in view of the distress caused by the COVID-19 crisis, by providing Member Lending Institutions (MLIs), 100 percent guarantee against any losses suffered by them due to non-repayment of the ECLGS funding by borrowers.  The eligibility criteria for availing credit under ECLGS are:

The overall ceiling initially announced for ECLGS was Rs 3 lakh crore which was subsequently enhanced to Rs 4.5 lakh crore. However, ECLGS being a demand driven scheme, sanctions/disbursements are made by lending institutions based on assessment of borrower’s requirement and their eligibility.

ECLGS is under the operational domain of Ministry of Finance, Department of Financial Services (DFS). As informed by DFS, as on 2.07.2021 an amount of Rs.2.73 lakh crore have been sanctioned under the scheme of which an amount of Rs.2.14 lakh crore has been disbursed. Total 1.14 crore borrowers have been issued guarantee under the scheme.

In order to ensure easy and softer repayment terms on the credit extended to the MSME sector, Government has capped the interest rate under ECLGS scheme at 9.25 percent for Banks and Financial Institutions and 14 percent for Non-Banking Financial Institutions. This scheme also offers a one year moratorium on payment of principle component.  In addition to this, the other scheme announced under Atma Nirbhar Bharat package i.e. ‘Credit Guarantee Scheme for Subordinate Debt’ also has moratorium clause of 7 years on the payment of principle component with the overall all repayment period of 10 years.  Ministry MSME is implementing various schemes and programmes to provide access to technology upgradation. These schemes include Technology Upgradation Component of Credit Linked Capital Subsidy Scheme and Technology Upgradation Scheme (CLCS-TUS), Micro and Small Enterprise – Cluster Development Programme (MSE-CDP), MSME Technology Centres (MSME-TCs), Technology Centre Systems Programme (TCSP) etc. These schemes are implemented across the country including the state of Maharashtra.

This information was given by Union Minister for Micro, Small and Medium Enterprises, Shri Narayan Rane in a written reply in Lok Sabha today.

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