Government Expands Scope of MSME Loan Guarantee Program to Include Large Businesses and Professionals
Government Expands Scope of MSME Loan Guarantee Program to Include Large Businesses and Professionals | Photo credit: ANI
New Delhi: Finance Minister Nirmala Sitharaman on Saturday August 1 authorized loans for large companies and professionals, including doctors and lawyers, for business purposes under the Emergency Lines of Credit Guarantee Program (ECLGS) .
The Ministry of Finance has increased the annual turnover limit for companies that could benefit from loans under the program to Rs 250 crore, from Rs 100 crore currently. The maximum amount of loans that can be used under the program has also been increased to Rs 10 crore from Rs 5 crore.
Debashish Panda, secretary of the financial services department, said that so far Rs 1.36 lakh crore has been sanctioned under the program, of which Rs 87,227 crore has been disbursed.
FM Sitharaman said the scope of the program has been broadened to include individual loans for working capital purposes and that larger MSMEs are likely to increase credit by Rs1 trillion in the overall ceiling of Rs 3,000. billion rupees for the program. As of July 29, 1,400 billion rupees had been sanctioned under the program, while 87,227 crore rupees had been disbursed.
The Rs 3 lakh crore loan guarantee program was announced as part of the government’s Atma Nirbhar program to provide liquidity support to these businesses. Under this program, the government provides a full loan guarantee for additional loans given to borrowers.
On May 21, Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25% through the Emergency Credit Line Guarantee Program (ECLGS) for the credit sector. MSME.
The program encourages banks and non-bank lenders to provide additional financing facilities to small borrowers by providing them with a 100% guarantee for any loss suffered by lenders in the event of default.