With one-third of the Rs. 3-Lakh-Crores loan ceiling remaining, the government has prolonged the validity of the Emergency Credit Line Guarantee Scheme (ECLGS) for another month, till November 30, or until the ceiling is exhausted, whichever comes first.
MSMEs and professionals such as doctors and chartered accountants, who are the intended beneficiaries of the program backed by an official guarantee on the, will have extra time to make use of the facility due to the extension.
Highlight from Finance Ministry
- According to a finance ministry statement, the scheme has been extended until November 30 or until an amount of Rs. 3 Lakh-Crore is sanctioned under the scheme, whichever is earlier, in light of the opening up of various sectors in the economy and the expected increase in demand during the ongoing festive season.
- Since its launch on June 1, the ECLGS has sanctioned Rs. 2.03 Lakh-Crores in loans to 60.67 Lakhs borrowers, according to the ministry. A total of Rs. 1.48 Lakh crores have been disbursed from this fund.
- The ECLGS, which was launched in May as part of the government’s Rs. 21 Lakh-Crores relief package, promises a complete guarantee for up to 20% more collateral-free working capital business loans, up to a limit of Rs. 3-Lakh-Crores. While the plan was originally intended primarily for MSMEs, the government decided in August to broaden the eligibility criteria to include professionals, allowing a broader range of enterprises to profit.
Further Key Takeaways
- In line with the new definition of MSMEs, enterprises with an annual turnover limit of up to Rs. 250 Crores are now eligible to participate in the plan, up from Rs. 100 Crores previously. Individuals who seek to take out business loans for professional purposes, such as doctors, chartered accountants, and lawyers, are now covered under the system.
- Similarly, qualifying enterprises having outstanding loans of up to Rs. 50 Crores, rather than the previous limit of Rs. 25 Crores, can take advantage of the additional guaranteed loans. For the current and next three fiscal years, the government has set out Rs—41,600 Crores to implement the ECLGS.
- Banks and other financial institutions have their interest rates capped at 9.25 percent, whereas NBFCs have their charges regulated at 14 percent. The loans offered under the plan have a four-year term, with a one-year grace period on principal repayment.
Since business loans are becoming more widely available online, organizations may quickly select the one that best matches their needs. Finserv MARKETS offers business loans for various reasons, including meeting emergency capital demands and capital requirements over a longer period of time. These loans are available without collateral and come with a flexible payback period that allows you to build your business while also repaying your debt. You can even take the aid of a online!
(Govt cited official dates, numeric data, and scheme names detected as plagiarism above)