The government guarantee schemes for micro, small and medium enterprises will be expanded to help companies beat the Covid-19 impact.
The emergency credit-linked guarantee scheme will be extended till March 2023, Finance Minister Nirmala Sitharaman said in her Budget 2022 speech on Tuesday. The scope of the scheme has also been extended to Rs 5 lakh crore from Rs 4.5 lakh crore.
The additional funds will be used to support the hospitality and related sectors, she said. So far, ECLGS has helped 1.3 crore MSMEs mitigate the pandemic impact.
The ECLGS allows borrowers to avail financing from institutional lenders, where they also receive a one-year moratorium on repayments. The government provides guarantees for such financing, making it a low risk product for lenders.
Also, the credit guarantee trust for MSMEs scheme will be revamped, facilitate additional credit of Rs 2 lakh crore to MSMEs, Sitharaman said.
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