MSME boost: credit line for individual entrepreneurs too
AIMING TO jumpstart the economy in the middle of a Covid slump, the government Saturday expanded the Emergency Credit Line Guarantee Scheme (ECLGS) to cover individual entrepreneurs, who run a large chunk of the over 6.3 crore Micro, Small and Medium Enterprises (MSMEs) across the country, and larger companies.
The scheme, which provides additional 20 per cent collateral-free credit, will now cover individual loans given for business purposes.
Besides, companies with outstanding loans of up to Rs 50 crore and annual turnover of up to Rs 250 crore, as on February 29, 2020, can avail additional financing — the earlier limit was Rs 25 crore and Rs 100 crore, respectively. This means that the maximum loan a unit can avail will rise to around Rs 10 crore as against Rs 5 crore earlier.
“A total of around Rs 1.37 lakh crore has been sanctioned under the scheme by member lending institutions to around 40 lakh accounts, of which around Rs 87,000 crore has been disbursed. The changes in the ECLGS scheme are likely to make an additional Rs 1 lakh crore eligible,” Department of Financial Services Secretary Debasish Panda said.
Under the scheme, banks offer up to Rs 3 lakh crore of government-guaranteed loans. Official figures till July 23 show that disbursement per loan account by private banks is nearly 5.6 times that of state-owned banks — Rs 14.95 lakh and Rs 2.66 lakh per borrower, respectively.
Various MSME associations and industry chambers had earlier suggested that the government should make ...
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