Updates on Emergency Credit Line Guarantee Scheme
- The Emergency Credit Line Guarantee Scheme (ECLGS) will be extended until March 2023, in the Union Budget 2022, by the Finance Minister.
- The cover will be increased by an additional Rs 50,000 crore to Rs 5 lakh crore.
- The Finance Minister stated that as the hospitality industry, which relies heavily on human contact, has not yet recovered to its pre-pandemic levels, more money will be set aside for it.
- The qualified borrowers who previously had a loan term of four years may now do so for five years.
- To borrowers covered by ECLGS 1.0, further ECLGS assistance of up to 10% of the debt as of February 29, 2020.
- Under ECLGS 3.0, the loan ceiling of Rs. 500 crore is no longer in effect.
- For each borrower, the maximum additional ECLGS assistance is capped at 40% or Rs. 200 crores, whichever is less.
- Now, the civil aviation sector is a qualified borrower.
Emergency Credit Line Guarantee Scheme
The Emergency Credit Line Guarantee Scheme (ECLGS) was approved by the Union Cabinet under Prime Minister Narendra Modi’s leadership in May 2020. The program was introduced as a component of the Atma Nirbhar Bharat package for Micro, Small, and Medium Enterprises (MSME) borrowers to lessen the hardship brought on by the COVID-19 pandemic. The Scheme is anticipated to benefit the economy and aid in its recovery by assisting MSMEs to continue operating in the face of the current unusual scenario.