Union Finance Minister Nirmala Sitharaman informed that largely the Micro, Small and Medium Enterprises (MSMEs) located in over three thousand TIER-2 towns were covered on the first day of sanctions of the collateral free loans. The amount sanctioned will help the MSMEs to meet the expenses towards payment of salaries, rent and restocking of goods.
While making announcement of the financial stimulus of over 20 lakh crore rupees under the Atmanirbhar Bharat Abhiyan, Sitharaman laid out the scheme for Emergency Credit Line Guarantee to the MSMEs. Collateral free loans worth three lakh crore rupees with one year moratorium was provisioned under the scheme.
Under this scheme, MSME and borrowers from other stressed sectors with up to 25 crore rupees of total borrowing were allowed to avail an additional 20 per cent of the outstanding loan from banks and other financial institutions. The additional lending by banks and financial institutions is 100 per cent guaranteed by the Government of India.