Chaired by Prime Miinister #NarendraModi, the cabinet meeting approved additional funding of up to Rs. 3 lakh crore to eligible #MSMEs and interested #MUDRA borrowers by way of Emergency Credit Line Guarantee Scheme. The scheme has been formulated as a response to the unprecedented situation caused by #COVID-19 and the consequent #lockdown, which has severely impacted manufacturing and other activities in the MSME sector.
Under the Scheme, 100% guarantee coverage will be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs. three lakh crore to eligible MSMEs and interested MUDRA borrowers, in the form of a Guaranteed Emergency Credit Line (GECL) facility.
For this purpose, corpus of Rs. 41,600 crore shall be provided by Government of India spread over the current and the next three financial years.
The Scheme would be applicable to all loans sanctioned under GECL Facility during the period from the date of announcement of the Scheme to 31.10.2020, or till an amount of Rs 3,00,000 crore is sanctioned under the GECL, whichever is earlier.
In view of the critical role of the MSME sector in the economy and in providing employment, the proposed Scheme is expected to provide much needed relief to the sector by incentivizing MLIs to provide additional credit of up to Rs.3 lakh crore to the sector at low cost, thereby enabling #MSMEs to meet their operational liabilities and restart their businesses.