Emergency Credit Line Guarantee Scheme (ECLGS)

February 2, 2022

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The Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs has been extended till March 2023 along with an enhanced guarantee cover by Rs 50,000 crore to take the total limit of the scheme to Rs 5 lakh crore from Rs 4.5 lakh earlier.

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ECLGS has provided the much-needed additional credit to more than 130 lakh MSMEs.
- This has helped them mitigate the worst impact of the pandemic.
This will help the revival of the hospitality and related travel services sector as they have been the worst hit with COVID 19 and also they face the most uncertainties of the next wave.
This move will give necessary stimulus for businesses to not shut down during these difficult times.

Emergency Credit Line Guarantee Scheme

It was announced as part of the Atma Nirbhar Bharat Package in 2020 with the objective to help businesses including MSMEs to meet their operational liabilities and resume business in view of the distress caused by the COVID-19 crisis, by providing Member Lending Institutions (MLIs), 100 percent guarantee against any losses suffered by them due to non-repayment of the ECLGS funding by borrowers.
ECLGS is under the operational domain of the Ministry of Finance, Department of Financial Services (DFS).
The eligibility criteria for availing credit under ECLGS are:
- For ECLGS 1.0: MSME units, Business Enterprises, Mudra Borrower and individual loans for the business purpose having loan outstanding up to Rs.50 crore and days past due up to 60 days as of 29.02.2020.
- For ECLGS 2.0: Borrowers belonging to 26 stressed sectors identified by Kamath Committee & the Healthcare sector have loans outstanding above Rs.50 crore and up to Rs.500 crore and days past due up to 60 days as of 29.02.2020.
- For ECLGS 3.0: Borrower belonging to Hospitality, Travel & Tourism, Leisure & Sporting and Civil Aviation sector having days past due upto 60 days as on 29.02.2020.
- For ECLGS 4.0: Existing Hospitals/Nursing Homes/Clinics/Medical Colleges/units engaged in manufacturing of liquid oxygen, oxygen cylinders etc. having credit facility with a lending institution with days past due up to 90 days as on March 31, 2021.

Source: IE