The government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by a month till November 30 until the entire Rs 3 lakh crore made available under the scheme is sanctioned, according to a finance ministry statement on Monday.
The finance ministry said in a statement that it has extended the scheme(Emergency Credit Line Guarantee Scheme) till the end of this month or “or till such time that an amount of Rs 3 trillion is sanctioned under the Scheme, whichever is earlier, in view of the opening up of various sectors in the economy and the expected increase in demand during the ongoing festive season.” The scheme, in place since May 23, had a deadline of October 31.
Loans of Rs 2.03 lakh crore have been sanctioned so far under the ECLGS since its rollout on June 1 to 60.67 lakh borrowers, the ministry said on Monday. Of this, an amount of Rs 1.48 lakh crore has been disbursed.
Under the Emergency Credit Line Guarantee Scheme, announced as part of the government’s Rs 21 lakh-crore relief package in May, the Centre has pledged full guarantee for up to 20% extra, collateral-free working capital loans, subject to the Rs 3-lakh-crore limit. While the scheme was initially meant for only MSMEs, the government, in August, decided to relax the eligibility criteria to cover professionals and enable a wider pool of businesses to benefit from it.
As part of its expanded coverage, companies with an annual turnover limit of up to Rs 250 crore are now eligible to tap the scheme, against that of Rs 100 crore earlier, in sync with the revised definition of MSMEs. Even individuals such as doctors, chartered accountants, lawyers, among others, who wish to take loans for professional purposes, are now covered under the scheme.
Similarly, eligible businesses with up to Rs 50 crore outstanding as of February 29, instead of Rs 25 crore earlier, can avail of the additional guaranteed loans. The government has earmarked a corpus of Rs 41,600 crore over the current and the next three financial years to implement the ECLGS.
Interest rates under the scheme are capped at 9.25% for banks and other financial institutions, and 14% for NBFCs. The tenor of loans provided under the scheme is four years, including a moratorium of one year on principal repayment.