New Delhi, Aug 1: The government on Saturday widened the scope of the Rs 3-lakh crore MSME credit guarantee scheme by doubling the upper ceiling of loans outstanding to Rs 50 crore and including certain individual loans given to professionals like doctors, lawyers and chartered accountants for business purposes under its ambit.
The tweaking of the Emergency Credit Line Guarantee Scheme (ECLGS) was done based on demand from trade bodies and in line with new MSME definition approved by the Union Cabinet in June.
Briefing the media about the changes made, Finance Minister Nirmala Sitharaman said the scheme will now include individual loans given for business purposes within the ambit of the ECLGS, subject to the eligibility criteria of the scheme.
"We have also decided to cover individual loans given to doctors, chartered accountants for business purposes under the scheme," Financial Services Secretary Debasish Panda said.
Similar procedure as with regard to companies would be adopted to sanction loans to these professionals running their business, he said.
To include more companies to take benefit of the scheme, he said, it has been decided to increase the upper ceiling of loans outstanding as on February 29 for being eligible under the scheme from Rs 25 crore to Rs 50 crore.
The maximum amount of guaranteed emergency credit line (GECL) funding under the scheme would also correspondingly increase from Rs 5 crore at present to Rs 10 crore, he said.
Announced as part of the Rs 20.97 lakh crore government economic package to tackle the impact of COVID-19, the scheme will now be applicable for companies with an annual turnover of Rs 250 crore as against the earlier Rs 100 crore.
Banks and non-banking financial companies (NBFCs) have approved loans worth about Rs 1.37 lakh crore while disbursement stood at Rs 87,227 crore at the end of July 29.
"Smaller companies were sufficiently covered under the scheme, so we wanted to include larger companies as well," Panda said.
The overall ceiling for the scheme remains at Rs 3 lakh crore and the validity of the scheme is till October, he added.