Credit and Finance for MSMEs: Loans amounting to Rs 3.32 lakh crore had been sanctioned beneath the Emergency Credit Line Guarantee Scheme (ECLGS) until April 30, 2022, of which Rs 2.54 lakh crore quantity was disbursed, the Reserve Bank of India (RBI) stated in its newest Financial Stability Report. The drawdown beneath ECLGS 1.0, 2.0 and its extension comprised over 97 per cent of the overall ensures issued. Launched on May 20, 2020, Rs 5-lakh-crore ECLGS supplied 100 per cent assure protection from National Credit Guarantee Trustee Company Limited (NCGTC) to pick out debtors. It was initially devised for MSMEs and enterprise enterprises whose whole fund-based credit score excellent throughout all lending establishments was as much as Rs 25 crore.
Private banks confirmed a higher urge for food than public banks in utilising totally different variations of ECLGSs. According to the info, Rs 95,700 crore was disbursed to contemporary debtors and Rs 34,600 crore to repeat debtors by non-public banks compared to Rs 79,800 crore to contemporary debtors and Rs 18,300 crore to repeat debtors by public banks. On the opposite hand, NBFCs had disbursed Rs 20,800 crore to contemporary debtors and Rs 7,700 to repeat debtors.
In phrases of borrower rely, non-public banks disbursed credit score to 67.61 lakh new debtors compared to 22.65 lakh new debtors supported by public sector banks. However, the variety of repeat debtors remained related for public banks at 1.02 lakh and personal banks at 78,000 whereas NBFCs had backed 95,000 repeat debtors and 11.35 lakh new debtors, knowledge confirmed.
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ECLGS has undergone a number of iterations via ECLGS 1.0, ECLGS 1.0 (Extension), ECLGS 2.0, ECLGS 2.0 (Extension), ECLGS 3.0, ECLGS 3.0 (Extension) and ECLGS 4.0 since its launch. The validity of ECLGS was prolonged to March 31, 2023, or until ensures for an quantity of Rs 5 lakh crore are issued.
In phrases of asset high quality, whereas the combination gross non-performing asset (GNPA) ratio of private and non-private banks within the MSME sector moderated from 11.3 per cent in September 2021 to 9.3 per cent in March 2022, it nonetheless stays comparatively excessive, the report famous. Also, Rs 46,186-crore restructured MSME portfolio, which constitutes 2.5 per cent of whole advances beneath the May 2021 Resolution Framework 2.0, has the potential to create stress within the sector, RBI cautioned within the report.
Source: www.financialexpress.com”