The global impact of the COVID-19 pandemic has been largely disruptive in every aspect, be it economic or something else. Every single industry has seen the adverse effects of this huge crisis, and a large number of people lost their jobs as a result. Similarly, small business owners also suffered a lot in the pandemic as it became nearly impossible to keep operations running smoothly. In those tough times, the Indian government introduced the COVID-19 financial relief package, under which the ECLGS scheme was also launched. ECLGS, or Emergency Credit Line Guarantee Scheme, is something under which financial entities in India provide emergency loan facilities to businesses and MSMEs that have suffered due to the COVID-19 pandemic.
ECLGS is a facility offered to extend emergency credit to small business entities in the country that are struggling to run their day-to-day operations. Under the ECLGS scheme, MSMEs can apply for loans to address their working capital needs, operational liabilities, or to restart businesses that have been affected by the pandemic. As a part of this, a number of banks and non-banking finance companies offered business loans for MSMEs. According to some sources, it has been estimated that ECLGS has prevented MSME loans worth Rs. 2.2 trillion from falling into the NPA (non-performing asset) category [source]. The best thing is that the government offers a 100% guarantee on the loans disbursed under this scheme.
To support a few more sectors, including hospitality, travel and tourism, leisure, sports, etc., the Indian government announced ECLGS 3.0. Under this scheme, MSMEs in the abovementioned sectors can get some additional credit to ensure smooth business operations. This time the credit limit was increased to 40%. ECLGS 3.0 itself has a validity date of June 30, 2021, and it also extended the validity of ECLGS 1.0 and ECLGS 2.0 by another 3 months. The tenure of granted loans is 6 years, including a moratorium period of 2 years.
Capri Loans is one of the leading NBFCs in India, offering hassle-free SME and MSME financing. You can explore our wide range of options to find a plan that matches the specific requirements of your business.