Tag: Credit Guarantee Scheme

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MSME

MSME Sector in India Gets Major Boost As Banks Sanction Rs 2.05 Lakh Cr Loans to 81 Lakh MSMEs Under Credit Guarantee Scheme

New Delhi, December 12: With an aim to help the MSME sector which was impacted by disruptions caused due to the coronavirus pandemic, the Finance Ministry on Friday said banks have sanctioned loans worth Rs 2,05,563 crore to about 81 lakh accounts under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector. In a series of tweets, the Finance Ministry said that as many as 40 lakh MSME accounts have received Rs 1,58,626 crore till December 4. Another tweet informed that Rs 3 lakh cr Collateral-Free Guaranteed Loans – Budgetary provision of Rs 4,000 crore made for the Scheme in First Supplementary Demand for Grants for FY 2020-21.

While announcing the Aatmanirbhar Bharat Package 3.0, Finance Minister Nirmala Sitharaman had said that Rs 2.05 lakh crore sanctioned and Rs 1.52 lakh crore disbursed under ECLGS 1.0. “As part of the Atmanirbhar Bharat Abhiyan 3.0 (announced on November 12), ECLGS Scheme has been extended through ECLGS 2.0 for the 26 stress sectors and health care sector with credit outstanding of above Rs 50 crore and up to Rs 500 crore as on February 29, 2020,” a tweet said. Credit Guarantee Scheme: Banks Sanction Rs 1.86 Lakh Cr to 50 Lakh MSMEs Impacted by Slowdown Amid COVID-19 Pandemic.

The Finance Ministry said that under ECLGS 2.0, entities with outstanding credit above Rs 50 crore and not exceeding Rs 500 crore as on February 29, 2020, which were less than or equal to 30 days past due as on February 29, 2020 are eligible. The loans provided under ECLGS 2.0 will have a five-year tenor, with a 12-month moratorium on repayment of principal. Meanwhile, the entire Scheme (ECLGS 1.0 and ECLGS 2.0) valid till March 31, 2021, it said.

As part of the Aatmanirbhar Bharat Package, the government has announced to cover 2.5 crore farmers under the KCC scheme with a credit boost of Rs 2 lakh crore through a special saturation drive.

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MSME

ECLGS for MSMEs: Banks Sanction Rs 1.87 Lakh Cr to 50.7 Lakh Business Units Under Credit Guarantee Scheme

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New Delhi, October 10: In a bid to help the micro, small and medium enterprises (MSMEs) sector, which has been the worst-hit by the COVID-19 pandemic, the Finance Ministry announced that banks have sanctioned loans of about Rs 1,87,579 crore to 50.7 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector. Reports inform that of the 50.7 lakh business units, about 27 lakh MSME units received cumulative disbursement of Rs 1,36,140 crore till October 5.

The scheme is the biggest fiscal component of the Rs 20-lakh crore Atmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May 2020 to mitigate the distress caused by lockdown due to COVID-19 by providing credit to different sectors, especially MSMEs. As released by the Finance Ministry, the latest numbers on ECLGS comprise disbursements by all 12 public sector banks (PSBs), 24 private sector banks and 31 non-banking financial companies (NBFCs).

“As of 5 Oct 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by PSBs, private banks & NBFCs to MSMEs and individuals stands at Rs 1,87,579 cr, of which Rs 1,36,140 cr has already been disbursed,” the finance minister said in a tweet. The loan amounts sanctioned by PSBs increased to Rs 81,648.82 crore, of which Rs 68,814.43 crore has been disbursed as of October 5, Sitharaman further added. At the same time, private sector banks have sanctioned Rs 86,576 crore of loans and disbursed Rs 59,740 crore, while NBFCs sanctioned Rs 3,032 crore with disbursement of Rs 2,227 crore.

“The ambit of the Scheme was expanded to include MSMEs with turnover of up to Rs 250 crore & individuals for business purposes. As of 05 Oct 2020, Rs 17,460 crore of loans to individuals have been sanctioned, of which Rs 5,939 crore has been disbursed,” she in a tweet. In another tweet, Sitharaman said as many as 33 stranded housing projects with investment of Rs 4,197 crore were accorded final approval under the SWAMIH scheme. “Special window for Affordable & Mid Income Housing Fund (SWAMIH) is working at a fast pace to provide relief to homeowners. As on 05.10.2020, 33 projects with investment of Rs 4,197 cr accorded final approval & will lead to completion of 25,048 home units,” the finance minister said in tweet.

The overall, 123 projects have now been sanctioned, including final approval to 33 projects, with an investment of Rs 12,079 crore that would target to provide relief to 81,308 homeowners, she said. On May 20, the Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for MSME sector.

Under the scheme, 100 percent guarantee coverage will be provided by the National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility. According to a report by PTI, for this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.

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Finance

MSME Credit Guarantee Scheme: Banks Disburse More Than Rs 1 Lakh Crore Under ECLGS as Part of Atmanirbhar Bharat Package

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Money

The banks have disbursed more than Rs 1 lakh crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector, the finance ministry said. The loans have been disbursed fall under Atmanirbhar Bharat Package. The latest numbers on ECLGS, as released by the finance ministry has disbursements by all 12 public sector banks (PSBs), 24 private sector banks and 31 non-banking financial companies (NBFCs). The total amount sanctioned under the scheme by banks now stands at Rs 1,50,759.45 crore, of which Rs 1,02,245.77 crore has already been disbursed as of August 18. “Under the 100 per cent ECLGS backed by a Government of India guarantee, banks from public and private sectors have sanctioned loans worth over ₹1.5 lakh crore as of August 18, 2020, of which more than ₹1 lakh crore has already been disbursed,” the Finance Ministry said in a statement.

The disbursement will largely help the MSME sector that has been impacted by the economic slowdown due to COVID-19. The ECLGS was announced by the Government as a part of Atmanirbhar Bharat Package, to mitigate the distress caused by lockdown due to coronavirus lockdown by providing credit to different sectors, especially MSMEs.

Meanwhile, the sanctioned amount too have surged past Rs 1.50 lakh crore at the end of August 18 under the 100 per cent ECLGS for micro, small and medium enterprises. The scheme is the biggest fiscal component of the Rs 20-lakh crore Atmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May.

Key Highlights:

1. Business units of Maharashtra have got the highest cumulative sanction of Rs 7,756 crore from banks, while disbursement stood at Rs 6,007 crore at the end of August 18.
2. Tamil Nadu is the second state which has received a sanction of Rs 7,740 crore, and disbursement of Rs 5,693 crore.
3. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.
4. The top lenders under the scheme are State Bank of India (SBI), Canara Bank, Punjab National Bank (PNB), Bank of India, Union Bank of India and HDFC Bank.
5. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.

The Finance Ministry said that under the ECLGS, Public Sector Banks (PSBs) have sanctioned loans of Rs 76,044.44 crore, out of which Rs 56,483.41 crore has already been disbursed whereas Private Sector Banks have sanctioned loans of Rs 74,715.02 crore out of which Rs 45,762.36 crore has already been disbursed. On May 20, the Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for MSME sector.

All MSME borrower accounts with an outstanding credit of up to Rs 50 crore as on February 29, which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 250 crore, are eligible for GECL funding under the scheme.