ECLGS bailed out 14.6 lakh MSMEs, says SBI report.

January 25, 2023

As per report, incentives provided by Emergency Credit Line Guarantee Scheme (ECLGS) have helped in boosting credit flow to MSMES.

Important points

MSME loan accounts worth Rs 2.2 lakh crore improved for entire banking industry.
Saved 12 percent of outstanding MSME credit from slipping into Non-Performing Asset and livelihood of nearly 6.6 crores.
MSME units becoming larger with several units crossing threshold of Rs 250 crore turnover and turning into mid-sized corporates by new definition of MSME units.

About ECLGS

ECLGS is a special scheme to provide 100 percent guarantee coverage to banks and NBFCs to enable them to extend emergency credit facilities to Business Enterprises/MSMEs.
It is under the purview of Ministry of Finance.
It was announced as part of AatmaNirbhar Bharat Package with:
- Emergency Credit Line of upto 20% of total outstanding as on February 29, 2020.
- 100% Guarantee Coverage with maximum tenure of 4 years from date of disbursement and one year moratorium on principal amount.
- It is managed by National Credit Guarantee Trustee Company Ltd (NCGTC) under trusteeship management
Other recent steps taken
- MSME definition was changed in 2020 with introduction of a composite criteria
- Udyam Assist Platform, developed by SIDBI (Small Industries Development Bank of India), to bring all informal micro enterprises (IMEs) into formal ambit. It would benefit up to 5 crore IMEs.