81 lakh MSMEs benefit from loans guaranteed by the government of Modi; more than Rs 2 lakh cr already sanctioned

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GeM added over 1 lakh of sellers in November 2020 itself.

Credit and financing for MSMEs: Almost 81 million MSMEs have benefited from Prime Minister Narendra Modi’s Emergency Credit Line Guarantee Program (ECLGS) under the Atmanirbhar Bharat program. Banks have sanctioned around Rs lakh 2.05 crore out of the Rs lakh 3 crore pledged under the program to help the MSME sector recover from the woes of the coronavirus. The Ministry of Finance said today that 40 lakh MSME accounts received Rs 1.58 lakh crore until December 4th. Outstanding credit exceeding Rs 50 crore and up to Rs 500 crore in February 2020, FinMin tweeted.

However, the additional liquidity provided by the program for the 26 affected sectors would be much higher at nearly 10 times the cash flow contraction due to the Covid -19-induced pandemic, according to a report from Crisil. If companies in high resilience sectors such as dairy products, information technology, consumer products, chemicals and pharmaceuticals are less impacted, with a decrease in their cash flow limited to 10%, they should also benefit from the ECLGS scheme.

Loans granted under ECGLS 2.0 have a term of five years, with a 12-month moratorium on principal repayment and the entire program is valid until the end of the current fiscal year 2020- 21. In further support of industry, energy, construction, real estate, textiles, pharmaceuticals, logistics, cement, automotive components and hotels are some of the sectors identified by the Kamath committee for a single debt restructuring.

It should be noted that the RBI had set up the committee chaired by the former president of ICICI bank, KV Kamath, to suggest financial parameters to be taken into account in resolution plans as part of the “Resolution framework for stress related to COVID-19 ”as well as a specific reference to the sector. ranges for such parameters. Meanwhile, the Ministry of Finance informed that Rs 775 crore had been paid to the Small Industries Development Bank of India (SIDBI) as part of the “MUDRA-Shishu loan interest subsidy” of 1,500 crore. of rupees. Of which, Rs 206.73 crore has already been paid to member lending institutions (IML) as part of the first tranche for the immediate release of the interest subsidy.

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