Emergency Credit Guarantee Scheme helped 14.6 lakh small businesses: Report

IndiaEmergency Credit Guarantee Scheme helped 14.6 lakh small businesses: Report
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The Emergency Credit Line Guarantee Scheme (ECLGS), launched to help small businesses during the Covid pandemic, helped save 14.6 lakh MSME units. These small enterprises got the benefit of an additional loan of Rs 2.2 lakh crore.

According to an analysis by SBI Research, this additional credit flow saved about 12 per cent of the outstanding loans of MSME (micro, small and medium enterprises) units from becoming NPAs (non-performing assets). In terms of people, it saved the livelihood of at least 66 million people.

ECLGS has helped MSMEs get credit and has helped at least 14.6 lakh units to sustain their businesses.

Soumya Kanti Ghosh, Chief Economist, State Bank of India (SBI), said that Rs 2.2 lakh crore loans were given to MSMEs through this scheme. This means that the scheme has helped prevent around 12 per cent of the outstanding loans to MSMEs from becoming bad loans. Along with this, the livelihood of 6.6 crore people was saved.

The report also said that the size of MSME units has also increased and many units have crossed the threshold of Rs 250 crore turnover and they come under the category of medium enterprises under the new definition. The definition of MSME was changed in the year 2020. With this change, it has been made mandatory for all MSMEs to register on the Udyam portal. As per the report, out of this, a total of 1.33 crore MSMEs have Udyam Certificates. While on the other hand the GST registration is only 1.40 cr.

According to the report, the Udyam portal can pave the way for a paradigm shift in the MSME sector and bring them under the purview of the organized credit system. There are about 6.4 crore MSMEs in the country while the number in China is 14 crore.

Credit: bharat.republicworld.com /

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