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Banks so far lent 90% of Rs 3 trn under emergency
credit scheme: Report
Banks have so far lent 90 per cent of the Rs 3 lakh crore under the emergency credit line guarantee
scheme announced last year to help small businesses tide over the pandemic
Banks have so far lent 90 per cent of the Rs 3 lakh crore under the emergency credit line guarantee scheme
announced last year to help small businesses tide over the pandemic, according to a report by Crisil.
On Monday, the government expanded the emergency credit line guarantee scheme (ECLGS) by another Rs 1.5
lakh crore, which Crisil feels will help alleviate the potential stress on the asset quality of banks arising from the
second wave of the pandemic.
Disbursements under the existing ECLGS have already reached Rs 2.69 lakh crore of the total corpus of Rs 3 lakh
crore, which is 89.7 per cent, benefiting almost 10 per cent of the value of banking sector advances and over 60
per cent value of advances to micro, small and medium enterprises, Crisil said in a note on Tuesday.
This, coupled with other steps like loan moratorium and loan resolution framework, has helped contain banks'
gross non-performing assets at 7.5 per cent in March 2021, down from 8.2 per cent in March 2020, the agency
Even micro, small, and medium businesses, which bore the brunt of the pandemic on their cash flows saw gross
NPAs increase by only less than 100 basis points, it noted.
On the Rs 7,500 crore credit guarantee scheme announced for loans given to microfinance institutions for on-
lending, Crisil said it will enhance funding access for the microlenders, and also ensure increased credit flow to
their small borrowers as they were unable to borrow from other avenues in the formal financial ecosystem.