After the consultations with the industry stakeholders, Union Finance Minister Nirmala Sitharaman has tweaked and widened the scope of the Rs. 3 lakh crore MSME credit guarantee scheme by doubling the upper ceiling of loans outstanding to Rs. 50 crore.

The Minister also allowed loans for larger Micro, Small and Medium Enterprises (MSMEs) and professionals for business purposes within the ambit of Emergency Credit Line Guarantee Scheme (ECLGS).

The Finance Ministry has increased the annual turnover ceiling of companies that could avail loans under the scheme to Rs. 250 crore from Rs. 100 crore at present. The maximum amount of loans that can be availed under the scheme has also been increased to Rs. 10 crore from Rs. 5 crore.

Sitharaman also said that the intended changes are likely to expand the ambit of ECLGS to make an additional amount of more than Rs. 1 lakh crore eligible under the scheme.

As of July 29, Banks have approved loans worth about Rs. 1.37 lakh crore while disbursement stood at Rs. 87,227 crore.

On May 20, the Cabinet had approved additional funding of up to Rs. 3 lakh crore at a concessional rate of 9.25 per cent through Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector.

Under the scheme, 100 per cent guarantee coverage will be provided by the National Credit Guarantee Trustee Company for additional funding of up to Rs. 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency borrowers in the form of a guaranteed emergency credit line (GECL) facility.