Banks sanction additional Rs 15,571Cr to MSMEs under ECLGS 2.0: Finance ministry

Banks have sanctioned an additional Rs 15,571 crore under the Emergency Credit Line Guarantee Scheme (ECLGS) to MSMEs that are impacted by the coronavirus pandemic, the finance ministry said on Wednesday.

In a tweet, the ministry said the Indian government announced ECLGS 1.0 to provide financial support to MSMEs, and ECLGS 2.0 to guarantee credit support for stressed sectors.

"Additional credit amounting to Rs 15,571 crore sanctioned to 2,772 borrowers while Rs 3,344 crore disbursed to 1,188 borrowers," it said.

This data has been provided by 12 public sector banks, top 24 private sector banks, and 31 NBFCs as on January 8.

With this, the total sanctioned amount under ECLGS 1.0 and 2.0 have increased to Rs 2.14 lakh crore, where 90.57 lakh MSMEs have been benefited.

Of this, Rs 1.65 lakh crore has been disbursed to 42.46 lakh MSMEs as on January 8, 2021.

ALSO READ

SOLV launches instant invoice financing platform for Indian MSMEs

Announcing the Aatmanirbhar Bharat Package 3.0 in November last year, Finance Minister Nirmala Sitharaman said Rs 2.05 lakh crore have been sanctioned, and Rs 1.52 lakh crore disbursed under ECLGS 1.0 since its launch.

As part of the Aatmanirbhar Bharat Abhiyan 3.0 (announced on November 12, 2020), ECLGS scheme was extended through ECLGS 2.0 for 26 stress sectors and healthcare sector, with credit outstanding of above Rs 50 crore and up to Rs 500 crore as on February 29, 2020.

The loans provided under ECLGS 2.0 have a five-year tenure, with a 12-month moratorium on repayment of principal. It said that the entire scheme (ECLGS 1.0 and ECLGS 2.0) is valid till March 31, 2021.

Indian MSMEs faced the maximum heat from the coronavirus pandemic that broke in India in March last year. FM Nirmala Sitharaman rolled out a slew of initiatives in May under the Rs 20 lakh crore Aatmanirbhar Bharat stimulus package to make India self-reliant at a time when production processes and supply chains were disrupted.