Recently the Emergency Credit Line Guarantee Scheme (ECLGS) was expanded by the Central Government.
With an aim to support various businesses affected by the second wave of COVID-19 pandemic, the Emergency Credit Line Guarantee Scheme (ECLGS) deadline has been extended till 31.03.2022. In other words, it has been decided to extend it till the issue of guarantees of Rs 4.5 lakh crore under ECLGS.
ECLGS was announced as part of the self-reliant India package. It aims to provide fully guaranteed and collateral free additional loans to Micro, Small and Medium Enterprises (MSMEs), Business Enterprises, Personal Loans for Business Purposes and borrowers of MUDRA Scheme.
The total ceiling announced initially was Rs 3 lakh crore, which was later raised to Rs 4.5 lakh crore.
ECLGS provides 100% guarantee coverage by the National Credit Guarantee Trustee Company (NCGTC) to member lending institutions (Banks, Financial Institutions and Non-Banking Financial Companies). This guarantee coverage to lending institutions is made available to eligible MSMEs on a guaranteed emergency credit line.
The following areas are covered under ECLGS:
ECLGS 1.0: MSME Units, Business Enterprises, Micro Units Development and Refinance Agency Limited (MUDRA) Borrower and Personal Loan for Business Purpose.
ECLGS 2.0: 26 stressed areas, and health care sectors, as identified by the Kamath committee.
ECLGS 3.0: Hospitality, Travel & Tourism, Leisure & Sports (Leisure – Sporting) and Civil Aviation Sectors.
ECLGS 4.0: Existing Hospitals/Nursing Homes/Clinics/Medical Colleges/Units engaged in manufacturing of Liquid Oxygen, Oxygen Cylinder etc.
Source – The Hindu