Government Schemes for MSMEs & NBFCs creating significant impact - Sanctions under Emergency Credit Line Guarantee Scheme (ECLGS)cross ₹ 79,000 crore

The interventions by Government for MSMEs, have been gaining rapid traction.  Under the Emergency Credit Line backed by a Government guarantee, Banks from Public & Private Sectors have so far already sanctioned loans worth over ₹ 79,000 crore as of June 20, 2020, of which more than ₹ 35,000 crore has already been disbursed.

The top lenders under the Scheme are SBI, HDFC Bank, Bank of Baroda, PNB & Canara Bank. This has helped 19 lakh MSMEs & other businesses restart their businesses post the lockdown. As part of the Aatmanirbhar package Government had announced its plans for ₹ 3 lakh Crore as additional credit to MSMEs and small businesses. Such enterprises were to be eligible to receive upto 20% of their existing borrowing as additional loans at interest rates which were capped.

Separately, under RBI’s Special Liquidity Facility announced in March-April, 2020, SIDBI has sanctioned over ₹ 10,220 crore to NBFCs, Micro Finance Institutions & Banks for lending to MSME & small borrowers.  National Housing Bank (NHB) has sanctioned its entire facility of ₹ 10,000 crore to Housing Finance Companies.  This refinance by SIDBI & NHB is in addition to ongoing schemes through which over ₹ 30,000 crore has been sanctioned. NBFCs & MFIs are being further helped under the Extended Partial Guarantee Scheme where approvals have crossed ₹ 5500 crore. Transactions for another ₹ 5000 crore are under process of approval while certain other deals are currently under negotiation.