The Cotton Textiles Export Promotion Council (TEXPROCIL) has welcomed the Government announcement of extension in tenor for repayment under Emergency Credit Line Guarantee Scheme (ECLGS) and said it will help MSMEs.
Manoj Patodia, Chairman, TEXPROCIL, said “The increase in the period for repayment of loans to 5 years has come as a huge relief for the MSMEs who are struggling hard to get back to business from the disruptions caused by the second wave of COVID-19 pandemic.”
The Government recently modified the ECLGS and borrowers who are eligible for restructuring as per RBI guidelines of 5 May 2021 and had availed loans under ECLGS 1.0 of overall tenure of four years comprising repayment of interest only during the first 12 months with repayment of principal and interest in 36 months thereafter will now be able to avail a tenure of five years for their ECLGS loan (i.e. repayment of interest only for the first 24 months with repayment of principal and interest in 36 months thereafter).
Apart from this an additional ECLGS assistance of up to 10 per cent of the outstanding as on 29 February 2020 to borrowers covered under ECLGS 1.0 has also been extended.
Manoj Patodia said, “This is a very positive measure as it will lead to an increase in the much needed cash flow for the MSMEs.”
The current ceiling of Rs. 500 crore of loan outstanding for eligibility under ECLGS 3.0 has also been removed, subject to maximum additional ECLGS assistance to each borrower being limited to 40 per cent or Rs. 200 crore, whichever is lower.
