Public sector banks account for about 47% of the total loan applications received under the ECLGS scheme. Whereas private sector banks have 44 per cent. But public sector banks have greater access to small borrowers, who account for 58 per cent of the number of loans disbursed, a study by credit bureaus found.
Under Emergency Credit Line Guarantee Scheme (ECLGS) up to 20% of the borrower’s total outstanding loan to MSMEs up to Rs. The government gives full guarantee of 25 crores. This is a part of Rs 20 lakh crore package to help industries affected by the COVID induced lockdown.
Public Sector Banks with their wide network started this scheme as soon as it started. This enabled the scheme to reach the maximum number of MSME borrowers spread across the country within a short span of time, the study said.
“Public sector banks took the lead on the implementation of ECLGS. Rajesh Kumar, MD & CEO, TransUnion CIBIL said that they have efficiently disseminated credit infusion to eligible MSMEs on time by cleverly using credit information analytics and digital drivers. “Credit infusion through ECLGS has set the MSME sector on a long-term and sustainable growth trajectory which bodes well for the revival of India’s economy.”
Very small and micro enterprises were the most affected by the crisis. The analysis of credit bureaus indicates that the ECLGS scheme has benefited this segment. Out of the total borrowers taking loans under the scheme, 58.5% belong to the very small category (total credit exposure less than Rs 10 lakh) and 32% belong to the micro category (total credit exposure between Rs 10 lakh to Rs 1 lakh). is) crores). In terms of value, the share of very small and micro segment is 30%
Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh and Karnataka are the top five states which are high in industrial and commercial activity and also have a significant share in the overall MSME exposure, contributing 47% of the total ECLGS loan disbursements.