Credit and Finance for MSMEs: Member lending institutions (MLIs) like public and private sector banks and non-banking monetary businesses (NBFCs) have sanctioned 76.6 per cent of the Rs 3-lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS) as of January 29, 2021. In a written reply to a query in the Rajya Sabha on Tuesday, MoS Finance Anurag Singh Thakur mentioned that cumulative loans sanctioned, as reported by different MLIs to National Credit Guarantee Trustee Company Ltd (NCGTC) stand at Rs 2.39 lakh crore below ECLGS as of January 29, 2021.
This is up from the sanctioned loan quantity of Rs 2,14,083 crore to 90,57,300 borrowers as of January 8, 2021. Out of the sanctioned quantity, Rs 1,65,886 crore was disbursed to 42,46,831 borrowers, according to the information from the Finance Ministry. The scheme was launched in May final year to assistance Covid-hit MSMEs but was later extended till March 31, 2020, with the launch of ECLGS 2. that was expanded in scope. The amended version of the scheme focused on entities in 26 stressed sectors identified by the Kamath Committee like energy, building, iron and steel manufacturing, roads, genuine estate, textiles, chemical substances, customer durables, non-ferrous metals, pharma manufacturing, logistics, gems and jewellery, cement, auto elements, hotels-restaurants-tourism, mining, plastic solution manufacturing, automobiles manufacturing, auto dealership, aviation, sugar, port and port services, shipping, constructing supplies, and corporate retail outlets, Thakur noted.
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Accounts with credit outstanding of more than Rs 50 crore and up to Rs 500 crore as of February 29, 2020, are eligible to raise credit below ECLGS 2.. The scheme also seeks borrower accounts to be significantly less than or equal to 30 days previous due as of February 29, 2020, that is, they need to not have been classified as SMA 1, SMA 2, or NPA by any of the lenders as of February 29, 2020. SMAs are unique mention accounts displaying indicators of incipient strain that lead to the borrower defaulting in servicing loan.
Budget 2021 had created a provision of Rs 15,700 crore to the MSME sector – more than double from Rs 7,572 crore in the preceding price range. Finance Minister Nirmala Sitharaman had also proposed a revision of the definition of tiny businesses in the price range by enhancing thresholds for paid-up capital from Rs 50 lakh to Rs 2 crore and turnover from Rs 2 crore to Rs 20 crore. “This will benefit more than two lakh companies in easing their compliance requirements,” the minister mentioned. “Provision of Rs 15,700 crores for MSME sector is welcome as this sector needs huge finance and policy support. Also, the announcement that faceless dispute resolution committee will be set up for smaller companies is very appreciable and commendable,” mentioned Sanjay Bhatia, MD, Hindustan Tin Works, and Past President, FICCI CMSME told TheSpuzz Online.