The very famous Emergency Credit Lines Guarantee Program (ECLGS) to support MSMEs in these troubled times of Covid-19 has got off to a good start, with public sector banks already sanctioning loans worth 10,361 , 75 crores.
These banks have so far disbursed ₹ 3,892.78 crore under the scheme, the finance minister’s office tweeted on Wednesday.
This program, which is a specific response to the unprecedented Covid-19 situation, aims to bring much needed relief to the MSME sector by incentivizing Member Credit Institutions (MLIs) to provide additional credit of up to ₹ 3 low-cost lakh crore, enabling MSMEs to meet their operational obligations and restart their business.
Under this program, loans to MSMEs by banks and NBFCs would be 100 percent guaranteed by the National Credit Guarantee Trustee Company (NCGTC). The loan will be extended in the form of an additional term loan facility for working capital in the case of banks and an additional term loan in the case of non-bank finance companies to MSMEs and interested borrowers from Pradhan Mantri Mudra Yojana.
The credit would represent up to 20 percent of the borrower’s total outstanding credit up to 25 crore, excluding off-balance sheet and non-fund-based exposures as of February 29, i.e. – say additional credit of up to ₹ 5 crore.
Meanwhile, the finance ministry said it paid up to 10,315 crore yen to 20.63 crore female Pradhan Mantri Jan Dhan Yojana (PMJDY) account holders towards the second installment (May). It should be remembered that the ₹ 10,029 crore was credited as the first installment (April) to 20.05 crore of women beneficiaries of the PMJDY.
This initiative of crediting 500 yen during each of April, May and June to women beneficiaries of the PMJDY was part of the 1.7 lakh crorr Pradhan Mantri Garib Kalyan 2020 (PMGKY) package which was deployed by the Minister of Finance Nirmala Sitharaman in March. 26 to protect the weakest and most vulnerable sections of society from the impact of the Covid-19-induced lockdown.
Up to 42 crore beneficiaries have received direct cash assistance via Direct Benefit Transfer (DBT) amounting to 53,248 crore under the PMGKP through June 2, the finance ministry said on Wednesday.