Chandigarh: Since the beginning of the Emergency Credit Line Guarantee Scheme (ECLGS) in May 2020, more than 1.88 micro, small and medium enterprises (MSMEs) of borrowers in Punjab have been disbursed by loans of 6,161 crores until November 16 this year.
This information was distributed at Rajya Sabha on Monday by the Union Minister Msmes Narayan Rane for a question raised by Rajya Sabha members from Punjab Pratap Singh Bajwa.
When ECLG was launched on May 2020, there were a total of 2,18,294 MSME bank accounts in Punjab qualified for ECLG but the initial response was bad from the MSME sector.
Announced Economic Stimulus, Minister of Finance Union Nirmala Sitharaman on May 13, 2020, launched Rs 3 Lakh Crore guaranteed free ECLG guarantees for MSMEs to overcome the cash crunch suffered during the Covid-19 pandemic period.
This loan is provided by the National Credit Guarantee Custedive Company (NCGTC) to the Bank, non-banking finance companies (NBFC) and financial institutions for further disbursement.
In September this year, the central government has extended the ECLGS timeline until March 31, 2022 or until the extended guarantee for a number of RS4.5 Lakh Crore is issued based on the scheme.
Rane further told Rajya Sabha that on November 19, the guarantee was released below the ECLG for loans approved 1.10 Crore MSME borrowers from all countries including Punjab, which formed around 95% of the amount of warranty issued.
For the question of whether the government has learned the reasons for the beneficiaries of the MSMEs to choose out of the scheme, the union minister replies that loan sanctions are a function of credit requirements for borrowers and business needs and member loan institutions provide sanctions on loans to MSME who meet the borrower’s requirements to apply it.
He added that in accordance with the Financial Services Department, data in connection with MSMEs chose to get out of the scheme was not maintained centrally.
“Industry in Punjab has not been able to reap the full benefits of ECLG and one of the reasons for this could be more number of micro industry units in this country compared to small and medium industries,” said Satish Verma, RBI) Chairperson of Professor (Economics) at the Center Research in rural and industrial development (Crid) in Chandigarh.
It also underlines the need to improve the industrial sector by increasing micro units into small and medium units, he added.
Ludhiana Based on Jindal Badish, President of the All Industries and Trade Forum, said that ECLGs benefited more banks compared to MSMEs because banks get safe customers.
“Compared to large industrial units, MSMEs have very bad debts.
Additional credit should be free, while the bank charged almost 7% to 9%.
They only increased the credit limit,” Jindal said.
The correct loan figures available by MSME borrowers under the emergency credit line guarantee scheme are given in the updated chart.
The previous chart accidentally carried mixed numbers stirring.
Error regrettable.