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Central government came up with a new scheme named Emergency Credit Line Guarantee Scheme (ECLGS) for the MSMEs in the country. This scheme is applicable to health sector and 26 other sectors as per the Kamath Committee. Finance Ministry overlooked the scheme formulation followed by implementation. Operational guidelines regarding the scheme were released by National Credit Trustee Company Limited (NCGTC). Loans will be provided to the entities with outstanding credit above 50 crores and less than 500 crores under this scheme. On December 4, 2020, Finance Ministry stated that around 2.05 lakh crores were sanctioned to around 81 lakh borrowers.
Scheme Overview:
| Scheme name: | Emergency Credit Line Guarantee Scheme (ECLGS) |
| Scheme under: | Central Government |
| Announced By: | Finance Minister, Nirmala Sitharaman |
| Benefit: | Financial Assistance by the way of collateral free loans |
| Main Objective: | To provide financial assistance and help revive the businesses of MSME units affected due to the pandemic situations |
Scheme Objectives and Benefits:
- This scheme aims at reviving the MSME units and businesses affected by the pandemic situations
- It aims at create jobs for helping those who are affected by loss of jobs during the pandemic
- This scheme will be beneficial for the unemployed youth in the country
- Financial assistance in the form of loans to the beneficiaries
- This scheme will enable the development ad smooth running of the MSME units
- These employments will contribute in the development of the MSME sector and overall economic state in the long run.
- It will revive the economy affected by the pandemic and lock-down situations previously
More scheme lunched by Central Government
Scheme Details:
- Emergency Credit Line Guarantee Scheme (ECLGS) is the scheme launched by the central government mainly for reviving the MSME sector in the economy
- This scheme provides financial assistance in the form of loans
- This scheme aims at creating new employment opportunities in the country
- Under the scheme, business units with due credit above Rs. 50 crores and not exceeding Rs. 500 crores as on February 29, 2020 will be given loans for revival
- These loans will be provided with a 5-year period
- These loans will be collateral/ security free and will be provided as fund based or non-fund based
- Such loans will be guaranteed by NCGTC
- As of December 4, 2020, over 2.05 lakh crores were sanctioned to 81 lakh borrowers or beneficiaries
- Around 1.58 lakhs crores were disbursed to 40 lakh borrowers
- About 45 lakh units are benefited with their revival, under this scheme
- The operational period ceiling under this scheme is March 31, 2021
