January 21, 2022

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Credit guarantee scheme aided Rs 13.5 lakh MSMEs: Study

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Credit guarantee scheme aided Rs 13.5 lakh MSMEs: Study
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Credit guarantee scheme aided Rs 13.5 lakh MSMEs: Study
Credit guarantee scheme aided Rs 13.5 lakh MSMEs: Study

NEW DELHI: The emergency credit line guarantee scheme (ECLGS) launched by the government amid the Covid pandemic has helped 13.5 lakh MSME units, saved 1.5 crore jobs and prevented 14% of MSME loans from turning into NPAs, a study by SBI Research has shown.
“We estimate almost 13.5 lakh MSME accounts were saved due to the ECLG scheme (including restructured): Almost 93.7% of such accounts are in the micro and small category. In absolute terms, MSME loan accounts worth Rs 1.8 lakh crore were saved from slipping into NPA during the period. This is equivalent to 14% of the outstanding MSME credit being saved from becoming NPA,” Soumya Kanti Ghosh, group chief economic adviser, State Bank of India (SBI), said in the report.
According to SBI’s analysis, if these units had turned non-performing, then 1.5 crore workers would have become unemployed. The ECLG scheme saved the livelihood for 6 crore families (assuming four family members per worker including herself), according to the report.
The trading sector (including small kirana shops) benefitted the most, followed by food processing, textiles and commercial realty. Among the states, Gujarat has been the biggest beneficiary, followed by Maharashtra, Tamil Nadu and Uttar Pradesh. The top 10 states accounted for about 75% of the outstanding amount that did not slip into NPAs (bad loans).
In May 2020, the Centre launched the ECLG scheme for the MSME sector. The SBI report said private companies benefited the most, followed by proprietorship firms. Referring to the third Covid wave, the SBI report said the new variant is more transmissible. However, studies so far show that the current Omicron variant is less severe than the Delta variant and the economy will escape unscathed from this.

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