Govt Widens Ambit of Rs 3 Lakh Crore MSME Credit Guarantee Scheme

 

The authorities on Saturday widened the scope of the Rs 3-lakh crore MSME credit score rating guarantee scheme by doubling the upper ceiling of loans glorious to Rs 50 crore and along with positive explicit individual loans given to professionals like docs, authorized professionals and chartered accountants for enterprise capabilities beneath its ambit.

The tweaking of the Emergency Credit Line Guarantee Scheme (ECLGS)was carried out based on demand from commerce our our bodies and in step with new MSME definition accredited by the Union Cabinet in June.

 

Briefing the media regarding the changes made, Finance Minister Nirmala Sitharaman talked about the scheme will now embody explicit individual loans given for enterprise capabilities all through the ambit of the ECLGS, matter to the eligibility requirements of the scheme.

“We have also decided to cover individual loans given to doctors, chartered accountants for business purposes under the scheme,” Financial Services Secretary Debasish Panda talked about.

Similar course of as with regard to companies might be adopted to sanction loans to these professionals working their enterprise, he talked about.

To embody additional companies to take benefit of the scheme, he talked about, it has been decided to increase the upper ceiling of loans glorious as on February 29 for being eligible beneath the scheme from Rs 25 crore to Rs 50 crore.

 

The most amount of assured emergency credit score rating line (GECL) funding beneath the scheme would moreover correspondingly improve from Rs 5 crore at present to Rs 10 crore, he talked about.

Announced as part of the Rs 20.97 lakh crore authorities monetary bundle to cope with the have an effect on of COVID-19, the scheme will now be related for companies with an annual turnover of Rs 250 crore as in opposition to the earlier Rs 100 crore.

Banks and non-banking financial companies (NBFCs) have accredited loans value about Rs 1.37 lakh crore whereas disbursement stood at Rs 87,227 crore on the end of July 29.

“Smaller companies were sufficiently covered under the scheme, so we wanted to include larger companies as well,” Panda talked about.

 

The whole ceiling for the scheme stays at Rs Three lakh crore and the validity of the scheme is till October, he added.

The finance minister talked about that the meant changes usually tend to develop the ambit of ECLGS to make an additional amount of higher than Rs 1 lakh crore eligible beneath the scheme.

On May 20, the Cabinet accredited additional funding of as a lot as Rs Three lakh crore at a concessional value of 9.25 per cent by the use of ECLGS for the MSME sector.

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Under the scheme, 100 per cent guarantee safety might be equipped by the National Credit Guarantee Trustee Company for added funding of as a lot as Rs Three lakh crore to eligible MSMEs and Micro Units Development and Refinance Agency debtors inside the kind of a assured emergency credit score rating line (GECL)facility.

 

For this goal, a corpus of Rs 41,600 crore was prepare by the federal authorities, unfold over the current and subsequent three financial years.

The scheme might be related to all loans sanctioned beneath the GECL facility by way of the interval from the date of announcement of the scheme to October 31 or till the amount of Rs Three lakh crore is sanctioned beneath GECL, whichever is earlier.

All MSME borrower accounts with a formidable credit score rating of as a lot as Rs 50 crore as on February 29, which had been decrease than or equal to 60 days late as on that date, i.e., widespread, SMA-Zero and SMA-1 accounts, and with an annual turnover of as a lot as Rs 250 crore, are eligible for GECL funding beneath the scheme.

Sharing particulars of various schemes launched beneath the ‘Aatmanirbhar Bharat Abhiyan’ bundle, Panda talked about banks have sanctioned about Rs 90,000 crore to about 1.1 crore Kisan Credit Card (KCC) holders to help farmers meet funds for kharif sowing and allied actions.

 

As part of the Rs 20.97 lakh crore stimulus bundle, the federal authorities had launched Rs 2 lakh crore of concessional credit score rating by the use of KCC to 2.5 crore farmers, along with fishermen and folks involved in animal husbandry.

Public sector banks (PSBs) have purchased bonds and enterprise papers value Rs 18,000 crore issued by NBFCs and housing finance companies beneath the revamped Partial Credit Guarantee Scheme (PCGS).

Besides, bonds and NCDs value Rs 5,800 crore are beneath technique of approval, Panda added.

The Union Cabinet on May 20 accredited the sovereign portfolio guarantee of as a lot as 20 per cent of the first loss for purchase of bonds or enterprise papers with a rating of AA and beneath along with unrated paper with distinctive or preliminary maturity of as a lot as one yr issued by NBFCs/HFCs/MFIs by public sector banks by the use of an extension of PCGS.

The Cabinet moreover extended the time interval of the scheme from June 30, 2020, to March 31, 2021, for purchase of pooled property of the distressed entities.