<h1 class="ql-align-center">Emergency Credit Line Guarantee Scheme (ECLGS)</h1> <h2>Context:</h2> <ul><li class="ql-align-justify">Recently, the Ministry of Finance has decided to extend the timeline of the Emergency Credit Line Guarantee Scheme (ECLGS) till 31.03.2022 or till guarantees for an amount of Rs 4.5 lakh crore are issued under the scheme, whichever is earlier.</li></ul> <h2>About:</h2> <ul><li>The scheme was launched as part of the Aatmanirbhar Bharat Abhiyan package&nbsp;announced in May 2020 to mitigate the distress caused by coronavirus-induced lockdown, by providing credit to different sectors, especially Micro, Small, and Medium Enterprises (MSMEs).</li></ul> <ul><li>Its objective is to provide&nbsp;fully guaranteed and collateral-free additional credit&nbsp;to MSMEs, business enterprises,&nbsp;MUDRA borrowers,&nbsp;and individual loans for business purposes.</li></ul> <ul><li>Under the Scheme, 100% guarantee coverage&nbsp;is being provided by&nbsp;National Credit Guarantee Trustee Company Limited (NCGTC),&nbsp;whereas Banks and Non-Banking Financial Companies (NBFCs) provide loans.</li></ul> <ul><li>The credit will be provided in the form of a Guaranteed Emergency Credit Line (GECL) facility</li></ul> <ul><li>Interest rates under the Scheme shall be capped at 9.25% for banks and FIs, and at 14% for NBFCs.</li></ul> <ul><li>No Guarantee Fee shall be charged by NCGTC from the Member Lending Institutions (MLIs) under the Scheme</li></ul> <h2>Benefits:</h2> <ul><li>The scheme is expected to provide credit to the sector at a low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.</li></ul> <ul><li>By supporting MSMEs to continue functioning during the current unprecedented situation, the Scheme is also expected to have a positive impact on the economy and support its revival.</li></ul>