Categories: Business

MSME to get loan now at 9.25%, government approves Rs 3 lakh crore emergency loan facility

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Cabinet approves Rs 3 lakh cr emergency credit line for MSME; loans at 9.25% rate

new Delhi. Central The cabinet on Wednesday approved a plan to provide additional loan of Rs 3 lakh crore for micro, small and medium enterprises (MSME) at a concessional rate of 9.25 percent. The scheme was approved in the meeting of the Union Cabinet chaired by Prime Minister Narendra Modi. This loan will be made available under the Emergency Credit Facility Guarantee Scheme (ECLGS) to the MSME sector most affected by the corona virus epidemic.

This emergency loan facility of Rs 3 lakh crore sanctioned for MSME sector is the second major announcement in the Rs 21 lakh crore package announced by the Central Government. Finance Minister Nirmala Sitharaman released the details of this package in several installments last week.

Loan up to 3 lakh rupees

Under the scheme, loans up to three lakh rupees will be given, on which the National Credit Guarantee Trustee Company (NCGTC) will provide 100 percent guarantee cover. This loan will be given to eligible MSMEs and borrowers under Mudra Yojana. This loan will be made available under the Guaranteed Emergency Credit Facility (GECL). For this, the Government of India will provide funds of Rs 41,600 crore. This fund will be for the next three financial years as well as the current financial year.

45 lakh MSMEs will benefit

It said that the scheme would be applicable to all loans sanctioned under GECL. The duration of the scheme will remain in force from the day of its announcement till 31 October or till the loans up to Rs 3 lakh crore are sanctioned under the scheme. Whichever is earlier, the scheme will remain in force till then. The objective of this scheme is to provide additional tax facility of up to three lakh crore rupees to 45 lakh MSMEs of the country in this hour of crisis. This financing will be made available as a fully guaranteed emergency loan facility.

They will get the benefit of the scheme

Regarding the eligibility of MSMEs, it states that units with annual turnover up to Rs 100 crore which are owed up to Rs 25 crore as on 29 February are in the special mention (SMA 1) scope of financial pressure, ie those blocked The account (NPA) was not declared, the same will be eligible to avail the scheme under GECL financing. These eligible MSMEs can be given loans up to 20 percent of their dues up to Rs 25 crore on 29 February 2020. For this, no guarantee fee will be charged from the lending institution by NPCGTC. Under the scheme, the interest rate for banks and financial institutions has been fixed at 9.25 percent, while for NBFCs it will be 14 percent.

This post was published on May 20, 2020 7:42 pm

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