This extension will provide an opportunity to those who have not availed of the scheme so far to obtain credit under the scheme

In view of the opening of various sectors in the economy, the Union Government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by one month till November 30th, 2020, or “till such time that an amount of Rs. 3 lakh crore is sanctioned under the Scheme, whichever is earlier,” the Ministry of Finance said in a statement on Monday.

The decision has been taken keeping in mind the expected surge in demand during the ongoing festive season.

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.

The Emergency Credit Line Guarantee Scheme was announced as part of the Aatma Nirbhar Bharat Package (ANBP) to provide fully guaranteed and collateral-free additional credit to MSMEs, business enterprises, individual loans for business purposes, and MUDRA borrowers, to the extent of 20% of their credit outstanding as on 29th Feb 2020.

Borrowers with credit outstanding up to Rs 50 crore as of February 29, and with an annual turnover of up to Rs. 250 crore are eligible under the Scheme.

Interest rates under the Emergency Credit Line Guarantee Scheme are capped at 9.25 percent for banks and financial institutions and 14% for NBFCs. The tenor of loans provided under the scheme is four years, including a moratorium of one year on principal repayment.

According to the data provided by Member Lending Institutions on the ECLGS portal, an amount of Rs 2.03 lakh crore has been sanctioned under the Scheme to 60.67 lakh borrowers so far, while an amount of Rs 1.48 lakh crore has been disbursed.