New Delhi: The Central Government has decided to extend the Emergency Credit Line Guarantee Scheme (ECLGS) for one month in view of the festive season. Under this scheme, loans will now be readily available for MSMEs till November 30. The government took this decision in the hope of increasing demand. The government had set a target of giving loans of Rs 3 lakh crore under this scheme, which has not been met.
Finance Minister Nirmala Sitharaman had launched the ECLGS scheme in May 2020 under the Self-Reliant India Campaign Package, which was in force till the end of October. Now it has been decided to extend this scheme till November 30, 2020 or till the amount of Rs 3 lakh crore is sanctioned, whichever is earlier. Those who have not yet been able to apply for a loan under this scheme will now get the benefit.
The ECLGS scheme was announced to provide fully guaranteed and collateral free loans to MSMEs, business enterprises, personal loan and business loan borrowers for business purposes up to 20 per cent of their credit balance by February 29, 2020. Borrowers with outstanding loans of Rs 50 crore and annual turnover of Rs 250 crore by February 29, 2020 are eligible under this scheme. Under this scheme, the interest rate has been fixed at 9.25 per cent for banks and financial institutions and 14 per cent for NBFCs. Under this scheme loan is provided for four years.
