The Tiruchi chapter of Laghu Udyog Bharathi, an organisation serving interests of small-scale industries with nation-wide presence, has thanked the Union Ministry for addressing the major concerns of the MSME sector.
Due to the implementation of RBI restructuring norms 2.0, the MSME units were unable to get additional loan. The need of MSMEs for moratorium and extension of last date for Emergency Credit Line Guarantee Scheme (ECLGS) was also not addressed.
A delegation of Laghu Udyog Bharathi called on Finance Minister Nirmala Sitharaman last month and highlighted its concerns.
The latest announcement by the Ministry of Finance has signified that the major concerns of the MSME sector have been factored in, K. Jeyendran, president, LUB Tiruchi Chapter, and G. Satheesh, Secretary, said in a press release.
As per the latest announcement, the existing MSME borrowers under ECLGS 1.0 , 2.0 would be eligible for additional credit support of up to 10 percent of total outstanding as on February 29, 2020 or March 31, 2021, whichever was higher.
Businesses that have not availed assistance under ECLGS 1.0, 2.0 can avail credit support of up to 30% of their credit outstanding as on March 31, 2021.
Businesses in sectors specified under ECLGS 3.0 that had not availed ECLGS can avail credit ujp to 40% of their outstanding as on March 31, 2021.
To support various businesses impacted by the second wave of COVID-19 pandemic, the timeline of the ECLGS has been extended till March 31, 2022, or till guarantees for an amount of ₹4.50 lakh crores were issued under the scheme, whichever was earlier. Further, the last date for disbursement under the scheme has also been extended to June 30, 2022.
Thanking the Finance Minister, the LUB functionaries said the modifications issued by the Finance Ministry would ensure that businesses adversely impacted by the second wave of COVID-19 would get enhanced collateral-free security. According to them, this would provide the much-needed support to all ECLGS MSME borrowers in time for the busy festival season.
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