Scheme with ₹ 41,600 crore corpus was to help MSMEs.
The Center has expanded its credit guarantee system to micro, small and medium enterprises (MSMEs) to cover loans to large companies, as well as to self-employed workers and professionals who have taken out loans for business purposes, Finance Minister Nirmala Sitharaman said on Saturday.
The Emergency Line of Credit Guarantee program was rolled out in May as part of the Centre’s Aatmanirbhar program in response to the COVID-19 crisis. It has a corpus of 41,600 crore and provides additional fully secured funding of up to ₹ 3 lakh crore. Eligible MSMEs were to have an annual turnover of up to 100 crore, with outstanding loans of up to ₹ 25 crore as of February 29, 2020.
87,000 crore disbursed
So far, banks have approved loans worth 1.36 lakh crore to 40 lakh MSME units under the program. More than 87,000 crore had already been disbursed, Financial Services Secretary Debashis Panda told reporters.
“Since there was more headroom available, it was decided to expand the program. We expect that ₹ 1 lakh crore may be sanctioned for additional beneficiaries due to the expansion, ”Ms. Sitharaman said, adding that the window would also remain open for initial MSME beneficiaries.
The program has been extended to cover businesses with turnover up to 250 crore, with outstanding loans up to ₹ 50 crore. Individual beneficiaries include both professionals such as doctors, lawyers and accountants, as well as self-employed workers such as salespeople or taxi drivers.
The government had received information in particular from non-bank financial companies that a large part of their clientele included such people, who had taken out loans in their own name for business purposes.