A total of 12 public sector banks, 24 private sector banks, and 31 non-banking financial companies have collectively dispensed 35.3 per cent of the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) as of August 24, 2020, according to the government records. Creditors have allotted Rs 1,05,926 crore as of August 24, 2020, out of Rs 1,55,995 crore sanctioned. The majority deployment of Rs 58,230 crore has been finished via PSBs, as per the figures tweeted by Finance Minister Nirmala Sitharaman’ s office. Importantly, the number of MSMEs supported stood at 23,77,808 – 52.8 percent of the 45 lakh MSME units
Out of nearly 23.78-lakh MSME accounts disbursed, a whopping 86.5 per cent or 20,57,762 accounts were supported with the aid of PSBs while private banks supplied credit to the final 3,20,046 MSME accounts. Even as we appreciate the efforts through the government but this needs to enlarge to nearly 7 crore MSMEs across the country to make them Atmanirbhar. The interest is certainly there amongst MSMEs to turn out to be self-sufficient but the support has to come from the government for not simply COVID-hit small businesses however others as well who also are impacted by way of the pandemic in some way or the other. Although, there were a few times in which MSMEs have reported challenges in securing credit under the scheme. The government have to ensure to remove this on-floor friction between banks and units.
State Bank of India endured being the main lender to MSMEs under the ECLGS. The bank has dispensed Rs 17,599 crore in 2,99,375 MSME accounts as of August 24, 2020, followed by Rs 7,621 crore allotted in 1,73,286 accounts by Punjab National Bank. The third bank in the tally was Canara bank that distributed Rs 6,773 crore in 3,91,382 accounts.
FM Sitharaman had introduced working capital support of 20 per cent of the outstanding credit score for MSMEs as on February 29, 2020, in the form of term loans at a concessional interest rate. Eligible MSMEs are required to have as much as Rs 25 crore outstanding and turnover of up to Rs 100 crore. The ECLGS Fund became registered on May 26, 2020.
