Agencies
Finance Minister Nirmala Sitharaman on Tuesday announced the extension of the emergency credit line guarantee scheme (ECLGS) by another year and expanded the guarantee cover by another Rs 50,000 crore specifically targeted at the crippled hospitality sector. This move by the government in the latest budget is expected to give fresh impetus to bank credit with lenders finding increasing comfort in the viability of businesses.
“The ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises,” the finance minister said as part of the budget speech. “The hospitality and related services, especially those by micro and small enterprises, are yet to regain their pre-pandemic level of business.”
The ECLGS has provided additional credit to more than 130 lakh MSMEs, to mitigate the adverse impact of the pandemic. ECLGS. As per Ministry of Finance’s report, disbursement under ECLGS stood at Rs. 2.14 lakh crore as of July 02, 2021.
“There has been concentrated efforts in the budget to fill the much-needed credit gap for the stressed sector – ELCGS extension specially for the struggling hospitality sector was much needed, the sector however, will take some more time to revive, unlike other sectors,” said Vikesh Agrawal CEO, AjvaFintech.
The finance minister also proposed revamping the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme, along with allocation of fresh funds. This is expected to facilitate additional credit of Rs 2 lakh crore for Micro and Small Enterprises and expand employment opportunities.
“The extension of the ECLGS comes as a relief to several MSMEs who faced testing times post the pandemic which made them financially fragile,” said Akash Gehani, COO & Co-founder, Instamojo. “With better access to credit, there is hope for the revival of existing businesses, and the creation of new businesses. The ECLGS has by far provided credit for lakhs of MSMEs preventing the sector from moving into the NPA category.”
“The ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises,” the finance minister said as part of the budget speech. “The hospitality and related services, especially those by micro and small enterprises, are yet to regain their pre-pandemic level of business.”
The ECLGS has provided additional credit to more than 130 lakh MSMEs, to mitigate the adverse impact of the pandemic. ECLGS. As per Ministry of Finance’s report, disbursement under ECLGS stood at Rs. 2.14 lakh crore as of July 02, 2021.
“There has been concentrated efforts in the budget to fill the much-needed credit gap for the stressed sector – ELCGS extension specially for the struggling hospitality sector was much needed, the sector however, will take some more time to revive, unlike other sectors,” said Vikesh Agrawal CEO, AjvaFintech.
The finance minister also proposed revamping the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme, along with allocation of fresh funds. This is expected to facilitate additional credit of Rs 2 lakh crore for Micro and Small Enterprises and expand employment opportunities.
“The extension of the ECLGS comes as a relief to several MSMEs who faced testing times post the pandemic which made them financially fragile,” said Akash Gehani, COO & Co-founder, Instamojo. “With better access to credit, there is hope for the revival of existing businesses, and the creation of new businesses. The ECLGS has by far provided credit for lakhs of MSMEs preventing the sector from moving into the NPA category.”
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