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Following up on Announcements – Loans to MSME Testify Swift Implementation

msme sector

At a times of crisis like the present one, people look for announcements about reliefs from the government. The Central government had announced a series of measures from the beginning of the crisis itself. But what is more important to note is that it has maintained a fast pace with regards to their implementation as well, which is what matters in the end. Take the example of MSME sector.

It was on May 13, 2020 that the MSME sector got the Aatmanirbhar package, in which a ₹3 lakh crore emergency credit line was the major highlight. Little more than a month from the announcement has passed, and already one third of the allocated amount has been sanctioned, helping the MSME (Micro, Small & Medium Enterprises) to cope with the Corona lockdown blues.

As on June 26, 2020, banks from public & private sectors have sanctioned loans worth over ₹1 lakh crore under the 100 % Emergency Credit Line Guarantee Scheme (ECLGS) backed by a Government guarantee. Out of this sanctioned sum, more than ₹45,000 crore has already been disbursed, which would help more than 30 lakh units of MSMEs & other businesses restart their businesses in this unlock phase.

₹3 lakh crore emergency credit line made MSMEs to be eligible to receive upto 20% of their existing borrowing as additional loans at interest rates which were capped.

So far, Public Sector Banks (PSBs) have sanctioned loans of ₹57,525.47 crore whereas Private Sector Banks have sanctioned loans of ₹44,335.52 crore under ECLGS. The top lenders under the Scheme are SBI, Bank of Baroda, PNB, Canara Bank & HDFC.

Be it Pradhan Mantri Garib Kalyan Yojana or package to MSMEs, the steps announced to mitigate Corona crisis have not remained as mere announcements on paper. Concerned ministries, implementing agencies have been rigorously putting effort to implement those measures in a time-bound manner, so that India can be rebooted in a fast-paced manner.