MSMEs introduce new schemes for an emergency loan as the government doubles credit to the outstanding limit. Now, MSMEs can provide up to two times emergency credit as Government doubles loan outstanding limit. The new scheme was launched by the Finance Minister Nirmala Sitharaman, in May with a package of Rs.3.7 lakh crore packages under the Rs.20 lakh crore economic stimulus.
It benefits individuals and a lot of MSMEs under the budget limit of Rs. 3 lakh crore emergency credit line Guarantee Scheme (ECLGS) for MSMEs & the Ministry of Finance has increased its scope in this current scenario. The government has increased the upper limit of the loan outstanding by 29 February 2020, from earlier up to Rs.25 crore to Rs.50 crore, for now, small businesses to increase credit. As per the eligibility guidelines provided by the government, MSMEs can seek emergency credit from banks and other NBFCs up to 20 percent of their outstanding amount. Hence, with the help of new modification, now borrowers are able to get credit up to Rs. 10 crore, which is 20 percent of Rs 50 crore, up from Rs.5 crore which is 20 percent of earlier Rs.25 crore. The government ready to increase the annual turnover ceiling to be eligible for the scheme from Rs. 100 crore to Rs.250 crore. According to the notification published by the National Credit Guarantee Trustee Company (NCGTC), it was “ by an increased ceiling of the loan outstanding, and the modified definition of MSMEs issued by the Ministry of MSME” to the heads of all financial institutions, scheduled commercial banks, and NBFCs.
The government is ready to increase the annual turnover to be eligible for the respective scheme from Rs. 100 crore to Rs.250 crore. According to the notification published by the National Credit Guarantee Trustee Company (NCGTC) to the heads of all financial institutions, scheduled commercial banks, and NBFCs.
The new scheme helps to make an emergency credit line to individuals and more small enterprises through MSMEs. This scheme can be availed until October 31, 2020. The Government advice that makes the best from the revised MSMEs by utilizing the scheme properly. As a result of the expansion of MSMEs, there was a new scope that was new borrowers can avail the credit up to Rs. 10 crore, which is 20 percent of 50 crores. These will result to lower the cost and keep prices of products more competitive. The small and medium enterprises constantly encouraged by the government to work on a strategy to increase export and reduce imports. Now, MSMEs also give importance to producing private security equipment. By emphasizing the importance of MSMEs helps budding entrepreneurs very well under the pandemic situation.
