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Emergency credit line guarantee scheme(ECLGS)

  • Posted By
    10Pointer
  • Categories
    Economy
  • Published
    28th Mar, 2022

Context 

  • According to the recently released official data,117.87 lakh businesses have been provided 100 percent guaranteed collateral-free loans under the Emergency credit line guarantee scheme till March 11, 2022.
  • Among these businesses, 95% were micro, small, and medium enterprises(MSMEs).

Emergency credit line guarantee scheme(ECLGS)

  • The scheme has been launched by the government of India in May,2020 at the time of the COVID-19  lockdown crisis especially for the MSMEs sector.
  • It is being launched with an objective to provide 100 % guaranteed coverage to banks and NBFCs to enable them to extend emergency credit facilities to business enterprises /MSMEs at the  COVID pandemic time to meet their additional term loan.

Key features

  • The business enterprises /MSMEs with outstanding loans up to Rs.50 crore as of February 29, 2020, and turnover of up to Rs 250 crore in FY2019-20  would be eligible beneficiaries under the scheme.
  • The interest rate charges are being capped at 9.25% for the banks and 14% for NBFCs.
  • A 12 month moratorium period would be given on the principal amount to the beneficiaries.
  • In the recent budget, the government has extended the scheme tenure till March 2023.

 

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