Eligible Ministry of Micro, Small and Medium Enterprises (MSME) borrowers will get an offer from their lending institutions for a pre-approved loan under the Rs 3 lakh crore scheme announced for micro, small and medium enterprises to help them deal with the impact of COVID-19.
The Guaranteed Emergency Credit Line (GECL) of Rs 3 lakh crore was announced as part of Rs 21 lakh crore package by the government. As per a set of FAQs, GECL is a loan for which 100 per cent guarantee would be provided by National Credit Guarantee Trustee Company to Member Lending Institutions (MLIs) — banks, financial institutions and NBFCs.
It seeks to provide much-needed relief to the MSME sector by incentivising lending institutions to provide additional credit of up to Rs 3 lakh crore at low cost, thereby enabling MSMEs to meet their operational liabilities and restart their businesses.
The loan will be extended in the form of additional working capital term loan facility in case of banks and additional term loan facility in case of NBFCs to eligible MSMEs/ business enterprises and interested Pradhan Mantri Mudra Yojana (PMMY) borrowers.
An ‘opt-out’ option will be provided to eligible borrowers and if a borrower is not interested in availing the loan, he/she may indicate accordingly, the report said.