Govt. extends emergency credit till June

#GS3 Mobilisation of Resources

News info:

The government extended the ₹3-lakh-crore emergency credit line guarantee scheme by another three months till June 30 and also widened its scope to new sectors, including hospitality, travel, and tourism.

Emergency Credit Line Guarantee Scheme

The scheme was launched as part of the Aatmanirbhar Bharat Abhiyan package announced in May 2020 to mitigate the distress caused by coronavirus-induced lockdown, by providing credit to different sectors, especially Micro, Small, and Medium Enterprises (MSMEs).


  • To provide fully guaranteed and collateral free additional credit to MSMEs, business enterprises, MUDRA borrowers, and individual loans for business purposes to the extent of 20% of their credit outstanding as of 29th February 2020.
  • 100% guarantee coverage is being provided by the National Credit Guarantee Trustee Company, whereas Banks and Non-Banking Financial Companies (NBFCs) provide loans.



  1. Borrowers with credit outstanding up to Rs. 50 crore as of 29th February 2020, and with an annual turnover of up to Rs. 250 crore are eligible under the Scheme.
  2. On 1st August, the government widened the scope of the Rs. 3 lakh crore-ECLGS scheme by doubling the upper ceiling of loans outstanding and including certain loans given to professionals like doctors, lawyers and chartered accountants for business purposes under its ambit.
  3. The tenor of loans provided under the Scheme is four years, including a moratorium of one year on principal repayment.
  4. Interest rates under the Scheme are capped at 9.25% for Banks and Financial Institutions (FIs), and 14% for NBFCs.

Present Status

As per data uploaded by Member Lending Institutions on the ECLGS portal, an amount of Rs. 2.03 lakh crore has been sanctioned under the Scheme to 60.67 lakh borrowers so far, while an amount of Rs. 1.48 lakh crore has been disbursed.


National Credit Guarantee Trustee Company Ltd

  • NCGTC is a private limited company incorporated under the Companies Act, 1956 in 2014, established by the Department of Financial Services, Ministry of Finance, as a wholly-owned company of the Government of India, to act as a common trustee company for multiple credit guarantee funds.
  • Credit guarantee programs are designed to share the lending risk of the lenders and in turn, facilitate access to finance for the prospective borrowers. collateral-free


  1. would involve extending credit of up to 40% of total credit outstanding across all lending institutions as of February 29, 2020.
  2. The tenor of loans granted under ECLGS 3.0 would be 6 years, including a moratorium period of 2 years. 
  3. The last date for disbursements has been extended to September 30.

Source: The Hindu

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