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This article is more than 1 year old.

NBFC body FIDC seeks 2 month extension of Rs 3 lakh crore MSME scheme

Mini

The Finance Industry Development Council (FIDC) on Saturday has written to the union finance ministry requesting to extend the operation of the ECLGS scheme by another two months.

NBFC body FIDC seeks 2 month extension of Rs 3 lakh crore MSME scheme
The Finance Industry Development Council (FIDC), a representative body of non-banking finance companies, on Saturday has written to the union finance ministry requesting to extend the operation of the ECLGS scheme by another two months.
The industry body said, "Allow guarantee cover on eligible loans sanctioned till December 31, 2020, and also request that the time to complete disbursement of such loans till March 31, 2020."
"Of course, the guarantees provided under the scheme would be subject to the limit of Rs 3,00,000 crores as announced earlier. We sincerely appeal for the kind consideration of the extension which would benefit several lakhs of deserving borrowers to help restore their businesses to the pre-pandemic levels and in the process help in the recovery of the economy at large," FIDC wrote in the letter.
It said the scheme is officially closing today in terms of loan sanctions but members are still being contacted by customers and educated on the benefits of the scheme.
"However the process of getting the necessary documentation done may take some more time. You may recall that categories of borrowers such as individuals and societies were included in the scheme a few weeks later and hence, the time available to cover all eligible customers were short," the industry body said.
Further, the FIDC said the ECLGS scheme announced by the government to provide financial assistance to small and medium borrowers to help them emerge out of financial difficulties and business disruptions caused by the COVID-19 pandemic has been very successful in its objective.
Announced as part of the Rs 20.97 lakh crore government economic package to tackle the impact of COVID-19, under the scheme, 100 percent guarantee coverage will be provided by the National Credit Guarantee Trustee Company for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency borrowers in the form of a guaranteed emergency credit line (GECL)facility.
For this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years. The scheme will be applicable to all loans sanctioned under the GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.
All MSME borrower accounts with an outstanding credit of up to Rs 50 crore as on February 29, which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0, and SMA-1 accounts, and with an annual turnover of up to Rs 250 crore, are eligible for GECL funding under the scheme.
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