Q. Consider the following statements regarding “Emergency Credit Line Guarantee Scheme (ECLGS)”:
1.It provides 100% coverage to banks to extend emergency credit to businesses/MSMEs hit by the Covid-19 pandemic.
2.It covers Collateral Free Automatic Loans up to Rs. 5lakh crores to eligible MSMEs.
Which of the statements given above is/are correct?
Answer: A
Notes:
Explanation: ECLGS aims to provide 100% guaranteed coverage to the banks, NBFCs and other lenders in order to enable them to extend emergency credit to businesses/MSMEs hit by the Covid-19 pandemic and struggling to meet their working capital requirements.
- Under ECLGS, 100% guarantee coverage to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for Collateral Free Automatic Loans up to Rs. 3 lakh crores to eligible MSMEs and interested MUDRA borrowers, in the form of a Guaranteed Emergency Credit Line (GECL) facility.
- Government periodically announced ECLGS 1.0, ECLGS 2.0 and ECLGS 3.0 and now ECLGS 4.0 to enhance the utility and impact of ECLGS by providing additional support to MSMEs.
Source: Economic Survey 2023
