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)’. |
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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 |
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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. |