Emergency Credit Line Guarantee Scheme

Helping MSME and SME Grow

Emergency Credit Line Guarantee Scheme (ECLGS)

Emergency Credit Line Guarantee Scheme (ECLGS)

The Emergency Credit Line Guarantee Scheme (ECLG-Scheme) was announced by the Hon. Finance Minister Smt. Nirmala Sitharaman on 13 May 2020 with an aim to mitigate the economic distress caused by COVID-19 and the consequent lockdown, and to provide additional credit to the MSMEs/ Business Enterprises to meet their operational liabilities and revive their businesses. The key features of the ECLG-Scheme are as follows:

Name of the Facility Emergency Credit Line Guarantee Scheme (ECLGS) (hereinafter referred as the ‘Scheme’) and the credit product for which guarantee would be provided under the Scheme shall be named as ‘Guaranteed Emergency Credit Line (GECL)’.
Purpose The Scheme aims to mitigate the economic distress caused by COVID-19 and the consequent lockdown. It seeks to provide additional credit, thereby enabling MSMEs/Business Enterprises to meet their operational liabilities and revive their businesses.
Facility Type Term Loan Facility
Eligible Borrower MSMEs/ Business Enterprises which are constituted as Proprietorships, Partnerships, Registered Companies, Trusts and Limited Liability Partnerships (LLPs).
Eligibility
  • All borrower accounts (MSMEs/ BEs) with combined outstanding loans of up to INR 25 Crore as on 29.2.2020, and annual turnover of up to INR 100 Crore in the previous financial year (2019-20) are eligible for GECL funding under the Scheme. In case accounts for FY 2019-20 are yet to be audited/ finalised, the Bank may rely upon the Borrower’s declaration of turnover.
  • Loans provided to MSMEs/ Business Enterprises constituted as proprietorship, partnership, registered company, trusts and Limited Liability Partnerships (LLPs) shall be eligible under the Scheme.
  • Total Outstanding Amount would comprise of the on-balance sheet exposure. Off-balance sheet and non-fund-based exposures will be excluded.
  • The Scheme is valid only for existing customers on the books of the Member Lending Institution (MLI), as on 29.02.2020.
  • Borrower accounts should be less than or equal to 60 days past due as on 29.02.2020 in order to be eligible under the Scheme. Borrower accounts which had NPA or SMA-2 status, as on 29.02.2020 shall not be eligible under the Scheme.
  • For loans having co-applicant, only those existing loans where entity is the primary co-applicant are covered under the Scheme for additional emergency funding.
  • In order to be eligible, the borrower must be GST registered in all cases where such registration is mandatory. This condition will not apply to borrowers that are not required to obtain GST registration.
  • Loans provided in individual capacity are not covered under the Scheme.
  • To be eligible under the Scheme it is not necessary that the existing loans of the borrowers should be covered under the ECLGS of NCGTC.
Credit Limit Credit under GECL would be up to 20% of the borrower’s total outstanding credit up to INR 25 Crore, excluding off-balance sheet and non-fund-based exposures, as on 29.02.2020, subject to the borrower meeting all the eligibility criteria.
Interest Rate Maximum 14 % per annum, during the entire tenor.
Moratorium A moratorium period of 1 (one) year on the principal amount shall be provided under the Scheme. Interest shall, however, be payable during the moratorium period. The principal shall be repaid in 36 (thirty six) instalments after the moratorium period is over.
Tenure Tenor of loans provided under the Scheme shall be 4 (four) years from the date of disbursement.
Validity of Scheme The Scheme would be applicable to all loans sanctioned under GECL during the period from 23 May 2020 to 31 October 2020, or till an amount of INR 3 lakh crore is sanctioned under GECL by all MLIs, whichever is earlier.
Processing fee/ Pre-payment penalty NIL
NCGTC Guidelines Please visit https://www.eclgs.com/
Note: The information provided above is only illustrative and not exhaustive.