Home Madrid Economy MSMEs Can Now Raise Up To 2X Emergency Loan As Government Doubles Outstanding Credit

MSMEs Can Now Raise Up To 2X Emergency Loan As Government Doubles Outstanding Credit

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The government has also increased the annual turnover limit to be eligible for the scheme.

Credit and finance for MSMEs: In order to benefit individuals and a greater number of MSMEs under the Emergency Credit Line Guarantee Program (ECLGS) of Rs 3 lakh crore for MSMEs, the Ministry of Finance has broadened its scope of application. The government has raised the upper limit on outstanding loans, as on February 29, 2020, from earlier to Rs 25 crore to Rs 50 crore now so more small businesses can raise credit. According to the eligibility guidelines, MSMEs can apply for emergency credit from banks and NBFCs up to 20% of their outstanding amount. Therefore, with the new modification, borrowers will now be able to obtain credit up to Rs 10 crore, which is 20% of Rs 50 crore, against Rs 5 crore – 20% of previous Rs 25 crore.

The government has also increased the annual turnover ceiling to be eligible for the program from Rs 100 crore to Rs 250 crore “in accordance with the increased ceiling on outstanding loans and the revised definition of MSMEs published by the Ministry of MSME”, as per the notification sent by the National Credit Guarantee Trustee Company (NCGTC) to executives of all listed commercial banks, financial institutions and NBFCs.

“The MSME Ministry thanks PM, FM and @FinMinIndia for expanding the reach of the ECLG program. The emergency credit facility will now cover individuals and more businesses, ”the MSME ministry said in tweeting the notification sent last week.

Read also : Delayed payments from MSMEs: the rate of settled cases remains low; Government urges buyers to pay dues within 45 days

“We advise you to make the most of the changes and ensure maximum use under the program,” read the notification signed by NCGTC CEO Durgesh Pandey. NCGTC acts as a trustee for several credit guarantee funds.

The program was launched by Finance Minister Nirmala Sitharaman in May as part of the Rs 3.7 lakh crore program for MSMEs as part of the announced Rs 20 lakh crore economic stimulus plan. The program can be used until October 31, 2020. According to the government, 45 million MSMEs affected by the Covid pandemic will “be able to resume their business activities and save their jobs”, according to the presentation of the Atmanirbhar Bharat campaign .

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