Centre extends ECLGS by one month till November 30

Union Government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by one month till November 30, 2020, or till an amount of Rs. 3 lakh crore is sanctioned under the scheme, whichever is earlier.

This has been done in view of the opening up of various sectors in the economy and the expected increase in demand during the ongoing festive season. This extension will provide a further opportunity to such borrowers who have not availed of the scheme so far, to obtain credit under the scheme.

Ministry of Finance in a tweet today said, "Government extends Emergency Credit Line Guarantee Scheme by one month. Loans of more than Rs. 2 lakh crore sanctioned under ECLGS."

Earlier in October 2020, the Finance Industry Development Council, a representative body of non-banking finance companies (NBFCs), had written to the Finance Minister Nirmala Sitharaman seeking an extension of the scheme that was ending in October by another two months till December-end.

The ECLGS was announced as part of the Atmanirbhar Bharat Package to provide fully guaranteed and collateral-free additional credit to MSMEs, business enterprises, individual loans for business purposes and MUDRA borrowers.

Borrowers with credit outstanding up to Rs 50 crore as on February 29, 2020, and with an annual turnover of up to Rs 250 crore are eligible under the scheme. Interest rates under the scheme are capped at 9.25 per cent for Banks and FIs and 14 per cent for NBFCs.

Tenure of loans provided under the scheme is four years, including a moratorium of one year on principal repayment. An amount of Rs 2.03 lakh crore has been sanctioned by the lending institutions under the scheme to 60.67 lakh borrowers so far, while an amount of Rs 1.48 lakh crore has been disbursed.