Finance Minister Nirmala Sitharaman on Saturday (August 1) allowed loans for larger firms and professionals including doctors, lawyers for the business purposes within the scope of Emergency Credit Line Guarantee Scheme (ECLGS).
The finance ministry has increased the annual turnover ceiling of companies that could avail loans under the scheme to Rs 250 crore from Rs 100 crore at present. The maximum amount of loans that can be availed under the scheme has also been increased to Rs 10 crore from Rs 5 crore.
Debashish Panda, Secretary, Department of financial services said that as much as Rs 1.36 lakh crore has been sanctioned under the scheme so far, out of which Rs 87,227 crore has been disbursed.
FM Sitharaman said the ambit of the scheme has been increased to include individual loans for working capital purposes and larger MSMEs are likely to boost credit offtake by Rs 1 trillion within the overall ceiling of Rs 3 trillion for the scheme. As of July 29, Rs 1.4 trillion had been sanctioned under the scheme while Rs 87,227 crore worth of loans disbursed.
The Rs 3 lakh crore loan guarantee scheme was announced as part of the government’s Atma Nirbhar package to provide liquidity support to such firms. Under the scheme, the government provides a full loan guarantee to the incremental loans given to borrowers.
On May 21, the Cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector.
The scheme provides incentives to banks and non-bank lenders to offer additional funding facilities to small borrowers by providing them 100 per cent guarantee for any losses suffered by the lenders due to any default.