Bikky Khosla | 24 Aug, 2020
The much-awaited Credit
Guarantee Scheme for Subordinate Debt for MSMEs was launched last week. Amid
the COVID-19 crisis, it was felt that the biggest challenge for stressed MSMEs
was in getting capital, and accordingly as part of Atmanirbhar Bharat package,
the Finance Minister on May 13 announced this Rs 20,000 crore scheme for promoters
of operational but stressed MSMEs. Since then, the sector has eagerly been
waiting for the scheme, and now its launch is a big relief.
The scheme is applicable for those
MSMEs whose accounts have been standard as of March 31, 2018 and have been in
regular operations, either as standard accounts, or as NPA accounts during
financial year 2018-19 and financial year 2019-20. It will be valid for MSME
units which are stressed, which are SMA-2 and NPA accounts as on April 30, 2020
who are eligible for restructuring as per the RBI guidelines. Promoters will be
given credit equal to 15 percent of his/her stake (equity plus debt) or Rs 75
lakh whichever is lower.
In another positive development, the
Union Cabinet also allowed all
non-banking financial companies (NBFCs) to provide discount loans to MSMEs
against dues from government departments, through the TReDS platform on which
so far only a selected NBFCs and banks were permitted. This step will help ease
the liquidity flow of MSMEs as they get their dues on the bills generated from
government departments and agencies after 90 days.
Meanwhile, loans disbursed
under the Emergency Credit Line Guarantee Scheme (ECLGS) reached close to Rs
1.02 lakh crore while the total sanctioned amount stood over Rs 1.51 lakh crore
as of August 18, 2020. This development is welcome, with sanctions increasing by
about Rs 12,000 crore and disbursement by close to Rs 10,000 crore in the last
15 days. It seems the government is going all out to ensure that liquidity
concerns of our MSMEs addressed adequately.
I invite your opinions.