In order to increase utilisation of the Emergency Credit Line Guarantee Scheme (ECLGS) and provide support to small businesses ahead of the festive season and economic upturn, the government has expanded the scheme by increasing the borrowing limit for availing loans. The ECLG scheme has been extended by six months to March 31, 2022 or till guarantees for Rs 4.5 trillion are issued, whichever is earlier. However, loans under the scheme can be disbursed till June 30.
The pace of loan sanctions under the scheme has slowed, and advances of about Rs 2.86 trillion were sanctioned as on September 24. Loans sanctioned as on July 2, were Rs 2.73 trillion. With the economic recovery and further modification of the scheme, the scheme is expected to pick up pace. The scheme has been modified to provide credit support of additional 10 per cent or up to 40 per cent of total credit outstanding as on February 29, 2020 or March 31, 2021, whichever is higher, to existing borrowers of ECLGS 1.0 and 2.0.
Those borrowers who have not availed ECLGS 1.0 and 2.0 can avail credit up to 30 per cent of credit outstanding as on March 31, 2021. Under ECLGS 1.0 and 2.0, loans loans were guaranteed up to 30 per cent of outstanding credit as on February 29, 2020. As the cut off date to avail loans under the scheme has been changed to March 31, 2021 from February 29, 2020, existing borrowers can avail incremental credit under that limit.
