INSUBCONTINENT EXCLUSIVE:
Collateral free loans have been given to small businesses under emergency credit line guarantee schemeAs many as 117.87 lakh businesses have
been provided 100 per cent guaranteed collateral free loans under the emergency credit line guarantee scheme (ECLGS) till March 11, 2022,
according to official data
Out of these, around 95 per cent were micro small and medium enterprises (MSMEs).Government gave this information recently in Parliament
However what exactly is ECLGS and how does it help small businesses, especially during the lockdown period, when disruptions had seriously
impacted such entities, needs to be known.So let us find out more about this scheme.What is ECLGS?Government had launched ECLGS in May 2020
when the Coronavirus-induced nation-wide lockdown was in place and the scheme was announced as part of the Aatma Nirbhar Bharat package.The
borrowers.Finance Minister Nirmala Sitharaman while presenting the union budget for 2022-23, had announced that ECLGS will be extended till
as the lenders offer pre-approved loans based on borrower's existing credit outstanding and there is no fresh appraisal undertaken by
lenders since additional credit is sanctioned over and above the credit facilities already assessed.Also, the interest rate is capped with a
view to lower the cost of credit and loans are sanctioned without any processing charges, pre- payment charges and guarantee fee.
