On 8th August 2020, Finance Minister Nirmala Sitharaman announced that the Central Government have extended its Emergency Credit Line Guarantee Scheme (ECLGS), credit guarantee scheme for the micro, small and medium enterprises(MSME), to cover the loans given to the large firms, self-employed professionals and people who have taken a loan for business purpose.
Emergency Credit Line Guarantee Scheme:
i.The scheme was introduced in May 2020, as a part of the Atmanirbhar package of the central government in response to COVID-19 global pandemic.
ii.The scheme has a corpus of Rs. 41,600 crores and with an additional guaranteed funding of up to Rs.3 lakh crore.
iii.An additional Rs.1 lakh crore is expected to be sanctioned to additional beneficiaries due to the expansion of the scheme.
iv.The individual beneficiaries of the scheme include professionals like doctors, Lawyers, chartered accountants and self-employed individuals like vendors, Taxi drivers and others.
i.The turnover limits to avail the loan under the scheme was increased to annual turnover of Rs.250 crore and outstanding loans up to Rs.50 crores from annual turnover up to Rs.100 crore with outstanding loans of up to Rs.25 crore.
The maximum loan amount under the scheme is also increased to Rs.10 crores from Rs.5 crores.
i.The scheme provides incentives to the lenders to provide an additional funding facility to the borrowers with a 100% guarantee for any losses suffered by the lenders.
ii.The collateral free loan provided under this scheme supports the small enterprises to pay salary, rent and restocking expenses.
i.Under these schemes, the banks have approved over Rs.1.36 lakh crore worth loans to around 40 lakh MSME units.
ii.Debashis Panda, Financial Service Secretary, informed that around Rs.87,000 crores has already been disbursed under this scheme.
Recent Related News:
i.Madhya Pradesh(MP) Chief Minister(CM) Shivraj Singh Chouhan re-launched Sambal Yojana to strengthen the lives of the poor and Scheduled Caste(SC) and Scheduled Tribe(ST) communities by providing them social security cover, right from birth to death. He transferred Rs 41.33 crores to 1903 beneficiaries account.
ii.The Cabinet has approved the proposal of Ministry of Petroleum & Natural Gas for extension of time limit by 3 months w.e.f. July 1, 2020 to benefit “Pradhan Mantri Garib Kalyan Yojana (PMGKY)- Ujjwala” beneficiaries till September 30, 2020.
About Ministry of Finance:
Union Minister– Nirmala Sitharaman
Minister of State– Anurag Singh Thakur