PSBs sanction Rs 19,668 cr loans to 71 MSME hubs under credit guarantee scheme
New Delhi: The Finance Ministry on Friday said public sector banks have sanctioned Rs 19,668.87 crore to 71 MSME hubs across the country under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS).
Disbursement in these clusters stood at Rs 12,871.50 crore as of July 15 to entities belonging to micro, small and medium enterprise (MSME) sector, hit hard by the COVID-19 crisis.
The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month.
“As of July 15, #PSBs have sanctioned loans worth Rs 19,668.87 crore for 71 #MSME hubs in 27 States/UTs under the 100 per cent Emergency Credit Line Guarantee Scheme, of which Rs 12,871.50 crore has already been disbursed,” Sitharaman said in a tweet.
Ahemdabad cluster has the highest sanction of Rs 1,983 crore, followed by Surat Rs 1,715 crore as on July 15.
“The July 15 update of the 100 per cent ECLGS loans to #MSME hubs marks a substantial increase over the July 8 update in terms of the amounts sanctioned and disbursed, and the number of accounts benefiting from the Scheme,” she said.
On May 20, the Cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for the MSME sector.
Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility.
For this purpose, a corpus of Rs 41,600 crore was provided by the government, spread over the current and next three financial years.
The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the plan to October 31 or till an amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.
The main objective of the scheme is to provide an incentive to member lending institutions to increase access and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by giving them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.
All MSME borrower accounts with an outstanding credit of up to Rs 25 crore as on February 29, which were less than or equal to 60 days past due as on that date, i e, regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 100 crore, would be eligible for GECL funding under the scheme.