The government has expanded the scope of the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) launched to deal with the Corona disaster. Under this scheme, apart from MSMEs, doctors, lawyers and chartered accountants (CAs) can also take guarantee-free loans to boost their business. At the same time, the government has doubled the limit of loan outstanding in this scheme.
Government also changed the definition of MSME
Coronavirus infection has had a negative impact on businesses and the economy. Trade organizations had sought relief from the government to deal with the disaster. Only after this, the government announced the ECLGS scheme for MSMEs in May. Under this scheme, MSMEs are to be given a guarantee free loan of Rs 3 lakh crore at low interest rate. Also, to give the benefit of this scheme to more and more businesses, the Union Cabinet in June also changed the definition of MSME. The new definition came into effect from 1 July.
Individual loan can be taken for business purpose
Giving information about these changes, Finance Minister Nirmala Sitharaman said on Saturday that now under this scheme personal loan can also be taken for business purpose. However, all the eligibility will have to be fulfilled under the scheme for taking a loan. Debashish Panda, secretary of financial services, said that we have now also included professionals like doctors, chartered accountants and lawyers in this scheme. The same procedure will be adopted for giving loans to these professionals, which is adopted for businessmen.
Loan outstanding doubled
Panda said that in order to benefit more and more companies from this scheme, the government has doubled the limit of loan outstanding. Now MSMEs which had outstanding loans of 50 crores on February 29, can also apply for loans under this scheme. The Guaranteed Emergency Credit Line (GECL) fund has been increased from Rs 5 crore to Rs 10 crore under this scheme. Apart from this, now companies with turnover of Rs 250 crore will also get the benefit of the scheme. Till now the limit was 100 crores.
So far, 1.37 lakh loan approved under the scheme
As of July 29, according to Finance Ministry data, banks and non-banking financial companies (NBFCs) have approved loans worth Rs 1.37 lakh crore. Out of this, 87,227 crore rupees have been disbursed. Debashish Panda said that small companies have been adequately covered under this scheme. Now preparations are on to include big companies. Panda said that loans can be availed under this scheme till 31 October. The Finance Minister said that for the expansion of the scheme, an additional allocation of Rs 1 lakh crore has been made in it. The scheme provides loans at the rate of 9.25%.