CENTRE WIDENS SCOPE OF EASY CREDIT SCHEME FOR MSMES

NEW DELHI: The government on Sunday expanded the scope of the ₹3 lakh crore easy credit scheme meant for micro, small and medium enterprises (MSMEs) to cover loans for setting up oxygen generation plants in hospitals, and extended its tenure by another three months up to September 30.

According to the modified version of the scheme -- Emergency Credit Line Guarantee Scheme (ECLGS 4.0) -- 100% guarantee cover will be available for loans up to ₹2 crore to hospitals, nursing homes, clinics and medical colleges for setting up on-site oxygen generation plants with an interest rate cap at 7.5%.

“The ECLGS 4.0 will further facilitate flow of institutional credit at reasonable terms to MSMEs,” a finance ministry spokesperson said. The ₹3 lakh crore ECLGS is one of the key components of the ₹20 lakh crore economic stimulus package launched in mid-May last year that offered additional working capital finance in the form of an easy term loan to small firms.

The scheme also included the ailing civil aviation sector and further liberalised credit terms for existing beneficiaries.

According to the banking industry, ECLGS has already exhausted ₹2.54 lakh crore, and only about ₹46,000 crore is now available under the scheme.

An official said: “The government may enhance the corpus depending on its demand.”