Msme Loan: Emergency Credit Line Guarantee Scheme (Eclgs)
Purpose of the Scheme:
To provide 100% guarantee coverage for the Guarantee Emergency Credit Line which shall be a pre-approved sanction limit of upto 20% of loan outstanding as on 29.02.2020 to eligible borrowers, in form of additional working Capital term loan facility in case of Banks and Financial Institutions and additional term loan facility in case of NBFC’s from all Member Lending Institutions (MLI’s) to MSME’s , including PMMY borrowers, in view of Covid 19 crisis, as a Special Scheme.
*Eligibility Criteria for MSME’s:
- All MSMe borrower accounts with a combined outstanding loan across all MLI’s upto Rs.25 Crores as on 29.2.2020 and annual turnover of upto Rs.100 Crores for FY 2019-20 are eligible.
- MSMEs would include loan covered under Pradhan Mantri Mudra Yojana extended on or before 29.02.2020 and reported on MUDRA portal.
- Scheme is valid for existing customers of the Banks/ FI’s account should be less than or equal to 60 daus past due as on 29.02.2020. All MSME borrowers which have not been classified as SMA 2 or NPA by any of the MLI’s a on 29.02.2020 will be eligible for the scheme.
- MSME borrower’s accounts which had NPA status or SMA 2 status as on 29.2.2020 shall not be eligible.
- MSME borrowers must be GST registered in all cases where such registration is mandatory. This condition will not apply to MSME’s that are not required to obtain GST registration.
* Loan amount eligible under the Guarantee Coverage:
- The amount of GECL funding to MSME borrowers will be in form of additional working capital term loan facility ( in case of Banks /FI’s) and additional term loan facility (in case of NBFC’s) would be upto 20% of their outstanding loans upto Rs.25 Crores as on 29.2.2020.
- In case borrower has existing limits with multiple lenders, GECL may be availed either through one Lender or multiple lenders depending upon the agreement between borrower and MLI.
- In case borrower wishes to take from any lender an amount more than the proportional 20% of outstanding credit that borrower has with that lender, a no objection certificate would be required from all other lenders.
- No NOC will be required if the GECL availed from particular lender is limited to proportional 20% of outstanding credit that the borrower has with that Lender.
*Nature of account & Tenure of credit:
A separate loan account should be opened for borrower distinct from existing loan accounts, for coverage under the scheme
The tenure of loans shall be 4 years from disbursement date. Moratorium period of one year on principal amount shall be provided to MSME borrower for the GECL funding during which interest shall be payable. Principal to be repaid in 36 installments after moratorium is over.