SME Times News Bureau | 03 Jul, 2020
benefits of the emergency credit line guarantee scheme (ECLGS) are not reaching
deserving Micro, Small and Medium Enterprises (MSMEs), said TransUnion CIBIL MD
and CEO Rajesh Kumar, quoting an analysis.
a FICCI webinar Kumar said, “According to the TransUnion CIBIL analysis,
it is heartening to note that almost 81% of eligible MSMEs in ECLGS are
sector is the lifeline of the country and in the current pandemic situation, it
is critical to find and fund MSMEs that are structurally strong to refuel
Indian economy, he added.
that ECLGS is a simple and enabling scheme that will benefit MSMEs. In the
COVID-19 scenario, TransUnion CIBIL is working towards helping and implementing
the scheme. It is a good opportunity for strengthening our monitoring system
CIBIL is reaching out to eligible borrowers and also monitoring portfolios of
existing and new loans, he added.
the objective and features of ECLGS, Kumar said that the scheme was launched by
the Government of India for supporting MSMEs in the COVID-19 crisis.
will provide relief to the MSME sector by incentivizing Member Lending
Institutions (MLIs) to provide additional credit of up to Rs 3 lakh crore at
low cost, enabling MSMEs to remain in business.
scheme will infuse liquidity in the MSME sector, providing 100% government
guaranteed loan for the period of 4 years including 12 months moratorium for
principal amount and with a limit of 20% of total outstanding of upto Rs 25
Mahajan, Joint Vice President, Market Planner - Commercial Business, TransUnion
CIBIL said that it is important to keep a watch on the signs on recovery to quickly align portfolio
signs of recovery include, starting of credit repayments, controlling
debt build-up, granting ECLGS support, CIBIL MSME Rank remaining intact in good
range, beginning of business transactions and good promoter risk situation.
added that MSME credit was going through tough time pre-COVID but ECLGS has set
the stage for boosting MSME sector.
Kumar, Senior Executive Committee Member, FICCI CMSME and Former CMD,
NSIC said that though the government has
formulated policies, there is still a gap which remains to be bridged between
MSMEs and access of funds. Due diligence by bankers is required while providing
funds to MSMEs for protecting the interest of the borrower and bank.
work on the ground with MSMEs and they can share the burden with banks and act
as intermediaries in disbursement of funds to MSMEs. He added that there is a
need for handholding of beneficiaries and FICCI has been working on this front
with the stakeholders.
Reddy, Member, FICCI-CMSME Executive Committee & Managing Director, Hitech
Magnetics & Electronics Private Limited said that economic
activities have begun but MSMEs are struggling and need support to recover.
government has launched various schemes and economic packages for providing
funds to MSMEs but the need is to understand how the sector can access these
funds. She added that MSMEs during COVID-19 crisis have quickly adopted
technology, Artificial Intelligence and robotics.
are also looking at diversification and are now supplying COVID related
products, Reddy said.