Business

Modi govt’s Rs 3 lakh cr ECLGS scheme for MSMEs crosses three-fourth mark in sanctioned loan amount

MSME Budget 2021 Expectations, Budget 2021 Expectations for MSMEAccounts with credit score excellent of greater than Rs 50 crore and as much as Rs 500 crore as of February 29, 2020, are eligible to lift credit score below ECLGS 2.0. (Photo supply: IE)

Credit and Finance for MSMEs: Member lending establishments (MLIs) together with private and non-private sector banks and non-banking monetary corporations (NBFCs) have sanctioned 76.6 per cent of the Rs 3-lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS) as of January 29, 2021. In a written reply to a query in the Rajya Sabha on Tuesday, MoS Finance Anurag Singh Thakur stated that cumulative loans sanctioned, as reported by varied MLIs to National Credit Guarantee Trustee Company Ltd (NCGTC) stand at Rs 2.39 lakh crore below ECLGS as of January 29, 2021.

This is up from the sanctioned loan amount of Rs 2,14,083 crore to 90,57,300 debtors as of January 8, 2021. Out of the sanctioned quantity, Rs 1,65,886 crore was disbursed to 42,46,831 debtors, in line with the info from the Finance Ministry. The scheme was launched in May final 12 months to help Covid-hit MSMEs however was later prolonged until March 31, 2020, with the launch of ECLGS 2.0 that was expanded in scope. The amended model of the scheme centered on entities in 26 harassed sectors recognized by the Kamath Committee together with energy, development, iron and metal manufacturing, roads, actual property, textiles, chemical substances, shopper durables, non-ferrous metals, pharma manufacturing, logistics, gems and jewelry, cement, auto parts, hotels-restaurants-tourism, mining, plastic product manufacturing, vehicles manufacturing, auto dealership, aviation, sugar, port and port providers, delivery, constructing supplies, and company stores, Thakur famous.

Also learn: Budget 2021 doubles MSME outlay to Rs 15,700 cr; cuts customs duty on steel products to help small units

Accounts with credit score excellent of greater than Rs 50 crore and as much as Rs 500 crore as of February 29, 2020, are eligible to lift credit score below ECLGS 2.0. The scheme additionally seeks borrower accounts to be lower than or equal to 30 days overdue as of February 29, 2020, that’s, they need to not have been labeled as SMA 1, SMA 2, or NPA by any of the lenders as of February 29, 2020. SMAs are particular point out accounts displaying indicators of incipient stress that result in the borrower defaulting in servicing mortgage.

Budget 2021 had made a provision of Rs 15,700 crore to the MSME sector – greater than double from Rs 7,572 crore in the previous finances. Finance Minister Nirmala Sitharaman had additionally proposed a revision of the definition of small corporations in the finances by enhancing thresholds for paid-up capital from Rs 50 lakh to Rs 2 crore and turnover from Rs 2 crore to Rs 20 crore. “This will benefit more than two lakh companies in easing their compliance requirements,” the minister stated. (*3*) stated Sanjay Bhatia, MD, Hindustan Tin Works, and Past President, FICCI CMSME instructed Financial Express Online.

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