IBEF: June 24, 2020
The interventions by Government for MSMEs, have been gaining rapid traction. Under the Emergency Credit Line backed by a Government guarantee, Banks from Public and Private Sectors have so far sanctioned loans worth over Rs 79,000 crore (US$ 11.21 billion) as of June 20, 2020, of which more than Rs 35,000 crore (US$ 4.97 billion) has already been disbursed.
The top lenders under the Scheme are SBI, HDFC Bank, Bank of Baroda, PNB and Canara Bank. This has helped 19 lakh MSMEs and other businesses restart their businesses post the lockdown. As part of the Aatmanirbhar package Government had announced its plans for Rs 3 lakh crore (US$ 42.56 billion) as additional credit to MSMEs and small businesses. Such enterprises were to be eligible to receive up to 20 per cent of their existing borrowing as additional loans at interest rates which were capped.
Separately, under RBI’s Special Liquidity Facility announced in March-April 2020, SIDBI has sanctioned over Rs 10,220 crore (US$ 1.45 billion) to NBFCs, Micro Finance Institutions and Banks for lending to MSME and small borrowers. National Housing Bank (NHB) has sanctioned its entire facility of Rs 10,000 crore (US$ 1.42 billion) to Housing Finance Companies. This refinance by SIDBI & NHB is in addition to ongoing schemes through which over Rs 30,000 crore (US$ 4.26 billion) has been sanctioned. NBFCs and MFIs are being further helped under the Extended Partial Guarantee Scheme where approvals have crossed Rs 5,500 crore (US$ 780.25 million). Transactions for another Rs 5,000 crore (US$ 709.32 million) are under process of approval while certain other deals are currently under negotiation.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.