ECLGS for MSMEs: Over 40% of Rs 3 lakh cr scheme disbursed to this many individuals, small businesses

Credit and Finance for MSMEs: The Modi government has disbursed Rs 1,25,425 crore — 41.8 per cent of the Rs 3 lakh crore under the Emergency Credit Line Guarantee Scheme (ECLGS) as on September 21, 2020, to 25,74,181 MSME and individual accounts, according to the latest government data. The government had announced the scheme on May 13, 2020, as part of the Atmanirbhar Bharat package to provide emergency credit to businesses from banks and NBFCs up to 20 per cent of entire outstanding credit as on February 20, 2020. However, in August, the scheme was expanded to offer individual loans to professionals like doctors, lawyers etc. The scheme can be availed till October 31, 2020.

Out of the total disbursement, 97.9 per cent — Rs 1,22,808 crore has been credited into 25,24,788 MSME accounts or 98 per cent of 25.74 lakh accounts, as per the data tweeted by the Finance Minister Nirmala Sitharaman’s office on Thursday. On the other hand, disbursement into remaining 1.91 per cent or 49,393 individual accounts stood at only 2 per cent — Rs 2,617.08 crore.

“The ambit of the Scheme was expanded to include MSMEs with a turnover of up to Rs 250 crore & individuals for business purposes,” Sitharaman’s office said in a tweet. The earlier turnover limit was Rs 100 crore. The MSME and individual loan accounts sanctioned as of September 21, 2020, were 41,40,385 and 2,82,290 respectively while the amount sanctioned for the two account types was Rs 1,67,503.21 crore and Rs 9,849.74 crore respectively.

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The total 25,74,1818 accounts disbursed as on September 21, 2020, are 57.2 per cent of the 45 lakh units that “can resume business activity and safeguard jobs,” the government had said while announcing the schemes.

Importantly, while the share of 12 public sector banks (PSB) remained higher than 24 private sector banks in terms of MSME accounts and amount disbursed, the share of private banks, in contrast, was higher than public banks when it came to individual accounts and the amount credited. PSBs credited Rs 65,051.89 crore into 21,68,217 MSME accounts while private banks had a share of Rs 57,756.32 crore disbursed into 3,56,571 MSME accounts. On the other hand, PSBs had disbursed 20,678 individual accounts involving Rs 499.82 crore while private banks were able to credit 28,715 individual accounts with Rs 2,117.27 crore as on September 21, 2020.