ECLGS: Rs 3.23 lakh crore loans granted by banks to 1.17 crore MSMEs, others: government

Credit and financing for MSMEs: Minister of State for MSMEs, Bhanu Pratap Singh Verma, said on Monday that 1.17 crore businesses including MSMEs had received loans of Rs 3.23 lakh crore under the line guarantee scheme National Credit Guarantee Trust Company (NCGTC), which operates ECLGS, in response to a written question to Rajya Sabha, Verma said that on the total beneficiaries, 95% or 1.12 crore were MSMEs. The sanctioned amount for MSMEs out of the total loan amount was so far Rs 2.16 lakh crore.

The sanctioned amount increased from Rs 2.46 lakh crore as of February 28, 2021, according to data shared by former MSME Minister Nitin Gadkari to Rajya Sabha last year. In terms of disbursements, Rs 2.36 lakh crore has been disbursed to MSMEs, PTI reported on February 10, 2022, quoting Finance Minister Nirmala Sitharaman in her response to the 2022-23 budget discussion at Lok Sabha.

The initial allowable limit under the ECLGS, which was launched in May 2020, was Rs 3 lakh crore, which was later increased to Rs 4.5 lakh crore. Sitharaman in the budget had increased the warranty coverage from Rs 50,000 crore to Rs 5 lakh crore. The additional funds have been earmarked exclusively for hospitality and related businesses, Verma said. The scheme is currently valid until March 31, 2023.

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In addition to MSMEs, ECLGS borrowers included other business enterprises incorporated as sole proprietorships, partnerships, registered companies, trusts and limited liability companies (LLPs); and individual businesses. Collateral is provided by NCGTC to member lending institutions, including banks and non-bank financial companies, in respect of credit extended to borrowers on their outstanding loan as of February 29, 2020.

Meanwhile, a parliamentary industry standing committee in its March 21 report had recommended the government extend the loan repayment period under the ECLGS to seven to eight years from the three to four current years to support MSMEs affected by the second wave of Covid.

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