Emergency credit Guarantee Scheme (ECLGS)

This scheme specially launched for the COVID-19 crisis by the Indian government.

This scheme provides 100% and guarantees coverage to Banks and NBFCs to enable them to extend emergency credit facilities to Business Enterprises / MSMEs in view to meet their additional term loan/ additional working capital requirement.

Silent Features

Emergency Credit Line

The amount of Emergency Credit line to be extended to Business Enterprises / MSMEs would be up to 20% of total outstanding as on Feb 29,2020.

100% Guarantee Coverage

100% guarantee coverage for additional fund sanctioned under Emergency credit guideline scheme

Eligible Borrower

Business Enterprises / MSMEs with outstanding loan of upto Rs.25 crore as on February 29, 2020 and turnover of upto Rs.100 crore in FY 2019-20.

Interest rate

The interest rate charged is capped at 9.25% for banks and 14% for NBFCs

Tenure

The maximum tenure of 4 years from the date of disbursement

Moratorium

Moratorium period on Principal amount is 12 months

Charges

No charge/ guarantee fee to be charged by MLIs/NCGTC

Eligibility

The eligibility criteria under the Scheme are as under:

• All MSME borrower accounts with combined outstanding loans across all MLIs of up to Rs. 25 crores as on 29.2.2020, and an annual turnover of up to Rs. 100 crore in FY 2019-20. In case accounts for FY 2019-20 are yet to be audited/finalized, the MLI may rely upon the borrower’s declaration of turnover.
• The Scheme is valid only for existing customers on the books of the MLI.
• Borrower accounts should be classified as regular, SMA-0, or SMA-1 as on 29.2.2020. Accounts classified as NPA or SMA-2 as on 29.2.2020 will not be eligible under the Scheme.
• The MSME borrower must be GST registered in all cases where such registration is mandatory. This condition will not apply to MSMEs that are not required to obtain GST registration.
• Loans provided in individual capacity will not be covered under the Scheme.