Madurai
Around 145 crore has been disbursed to micro small and medium enterprises (MSMEs) in Madurai district under the Emergency Credit Line Guarantee Scheme (ECLGS) till June 30, according to Lead District Manager K. Arivalagan.
He said that the loan amount has been disbursed to around 8,910 bank accounts of the district to support the industries in view of the economic distress caused by COVID-19 pandemic. He said that industries can avail a loan of 20% of the outstanding loans as on February 29, 2020, up to a maximum amount of ₹ 5 crore.
K. Ramachandran, a partner of Shenbagamoorthy Tech Services, a micro industry, had availed ₹ 10 lakh through the scheme. “As businesses were closed for nearly three months, we direly needed money to restart operations. So, availing loan through the scheme was definitely a timely help,” he said.
Concurring with this viewpoint P.J. Bansidhar, proprietor of JB Hydraaulics - a machinery manufacturing micro industry, said that the loan amount helped to cover expenses. “I had availed ₹ 7.6 lakh through the scheme. 10% of the amount was used to pay salaries to my employees and dues to my suppliers. The remaining amount was used to pay for pending government dues,” he said.
But, repayment would be difficult if lockdown extends, he added. “It would be helpful if the government waives interest for these loans,” he said.
However, some industries are still facing difficulties in availing the loans during the complete lockdown period, said President of K. Pudur Industrial Estate Association M.S. Sampath. “Banks often say that they are working with limited staff members and as a result, even normal banking operations get delayed,” he said.
“Though the Reserve Bank of India (RBI) had clearly announced the guidelines for the granting loans, there are still banks that reject applications, citing stricter norms,” he added.
While nationalised banks grant loans to the industries, it is difficult to procure loans from private banks, said K.R. Gnanasambandan, convenor of COVID-19 Redressal Committee of Madurai District Tiny and Small Scale Industries Association (MADITSSIA).
B. Muruganandham, President, MADITSSIA, said that there was still no clarity on the total loan limit allocated for Madurai district. “This loan scheme aims to help the MSMEs from economic distress due to pandemic. However, it would have been better if a grant was offered for MSMEs,” he said.
The other issue was calculating the loan amount based on the outstanding amount as on February 29, said Mr. Gnanasambandan. “Since it was the end of the financial year, many industries had already repaid a large portion of the borrowed money. It would have been better if the loan was calculated based on the sanctioned amount,” he added.
“Also, for industries that have not borrowed from banks, a loan amount of 20% can be calculated on their annual turnover based on their GST filings,” he said.