The Finance Industry Development Council (FIDC), a representative body of NBFCs, has urged Finance Minister Nirmala Sitharaman to extend the tenure of the ₹3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) by two more months.
The scheme, which was recently expanded to cover individuals too, should be extended by two months to allow guarantee cover on eligible loans sanctioned till December 31, FIDC Director-General Mahesh Thakkar said in a letter to the Finance Minister.
Also, the time to complete the disbursement of such loans must be extended to March 31 next year, the letter said, adding that such extensions are necessary in the interest of small and marginal borrowers.
Any extension of the scheme will help several lakhs of deserving borrowers torestore their businesses to the pre-pandemic levels and in the process help in the recovery of the economy at large, the FIDC said.
The ECLGS scheme officially closed on Saturday in terms of loan sanctions.
FIDC submitted that an estimated 4-5 lakh customers are still being contacted by its members and educated on the benefits of the scheme and the process of getting the necessary documentation done may take some more time.
It pointed out that categories of borrowers such as individuals and societies were included in the scheme a few weeks later and hence the time available to cover all eligible borrowers was short.
It maybe recalled that the ₹3-lakh crore ECLGS was rolled out as part of the Aatmanirbhar Bharat Package to provide credit support to small and medium enterprises (SMEs) and help them emerge out of financial difficulties and business disruptions caused by the pandemic.
The government had also hiked the upper ceiling of outstanding loans under the scheme from ₹25 crore to ₹50 crore and hiked the turnover ceiling to ₹250 crore from ₹100 crore.
As of September 21, the total amount sanctioned under the 100 per cent ECLGS by public sector banks and private banks stood at ₹1.77 lakh crore, of which ₹1.25 lakh crore has already been disbursed.