The Emergency Credit Line Guarantee Scheme (ECLGS), launched to help small businesses during the Covid pandemic, helped save 14.6 lakh MSME units. These small enterprises got the benefit of additional loan of Rs 2.2 lakh crore.
According to an analysis by SBI Research, this additional credit flow saved about 12 per cent of the outstanding loans of MSME (micro, small and medium enterprises) units from becoming NPAs (non-performing assets). In terms of people, it saved the livelihood of at least 6.6 crore people.
ECLGS has helped MSMEs in getting loans and it has helped at least 14.6 lakh units to sustain their businesses. Soumya Kanti Ghosh, Chief Economist of State Bank of India (SBI), said that Rs 2.2 lakh crore loans were given to MSMEs through this scheme. This means that this scheme has helped prevent about 12 percent of the outstanding loans on MSMEs from becoming bad loans. Along with this, the livelihood of 6.6 crore people was saved.
It has also been said in the report that the size of MSME units has also increased and the turnover of many units has crossed the threshold of Rs 250 crore and they have come under the category of medium enterprises under the new definition. The definition of MSME was changed in the year 2020. With this change, it has been made mandatory for all MSMEs to register on Udyam Portal. According to the report, out of this, a total of 1.33 crore MSMEs have Udyam Certificates, while on the other hand, GST registration is only 1.40 crore.
According to the report, the Udyam portal can pave the way for a massive change in the MSME sector and bring them under the purview of the organized credit system. There are about 6.4 crore MSMEs in the country while in China this number is 14 crore.
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