Emergency credit scheme extended till November 30

Tribune News Service

New Delhi, November 2

Faced with a continuing reluctance of the industry to borrow, the government has extended the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs by one month till November 30 with the hope that the festival season might see higher offtake.

“This extension will provide a further opportunity to such borrowers who have not availed of the scheme so far, to obtain credit under the scheme,” said a statement.

While banks have been quick to sanction loans, actual disbursements have been slow. According to the statement, Rs 2.03 lakh crore has been sanctioned so far to 60.67 lakh borrowers while actual disbursals are just Rs 1.48 lakh crore, six months after the scheme was launched.

Another Rs 30,000-crore special liquidity scheme, which was closed on the due date, saw less than a quarter of funds disbursed to stressed NBFCs.

Announced in May, the ECLGS has had a sluggish past despite review meetings with bankers at the highest levels by PM Narendra Modi and Union Finance Minister Nirmala Sitharaman.