Govt extends Emergency Credit Line Guarantee Scheme to aid MSMEs

at 5:14 pm
Sitharaman
Finance Minister Nirmala Sitharaman

New Delhi (NVI): In a bid to support MSMEs amid COVID pandemic, the central government today extended the validity of Emergency Credit Line Guarantee Scheme (ECLGS) till September 30 this year.

The government has also announced to provide full guarantee cover to loans up to Rs.2 crore to medical facilities and institutions for setting up oxygen generation plants.

“100% guarantee cover to loans up to Rs.2 crore to hospitals/nursing homes/clinics/medical colleges for setting up on-site oxygen generation plants, interest rate capped at 7.5%,” the Finance Ministry said in a statement.

The validity of ECLGS has extended to September 30, 2021 (30.09.2021) or till guarantees for an amount of Rs.3 lakh crore are issued. Disbursement under the scheme permitted up to December 31, 2021 (31.12.2021), it said.

Borrowers who are eligible for restructuring as per RBI guidelines of May 05, 2021 and had availed loans under ECLGS 1.0 of overall tenure of four years comprising of  repayment of interest only during the first 12 months with repayment of principal and interest in 36 months thereafter will now be able to avail a tenure of five years for their ECLGS loan i.e. repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter, the Ministry said.

“Additional ECLGS assistance of up to 10% of the outstanding as on February 29, 2020, to borrowers covered under ECLGS 1.0, in tandem with restructuring as per RBI guidelines of May 05, 2021,” the statement read.

Current ceiling of Rs. 500 Cr. of loan outstanding for eligibility under ECLGS 3.0 to be removed, subject to maximum additional ECLGS assistance to each borrower being limited to 40% or Rs.200 crore, whichever is lower.

Civil Aviation sector to be eligible under ECLGS 3.0, the Ministry added.