The Centre on Monday announced an additional Rs 1.5 lakh crore for emergency credit line guarantee scheme (ECLGS), which will facilitate loans through micro finance institutions to 25 lakh persons.
Finance Minister Nirmala Sitharaman said while announcing the scheme that the guarantee will be given to scheduled commercial banks for loans to new or existing non banking finance companies or micro finance institutions, on lending up to Rs 1.25 lakh to around 25 lakh borrowers
Interest rate from banks will be capped at MCLR plus 2 per cent, Ms Sitharaman said.
The maximum loan tenure will be of three year and 80 per cent of assistance will be used by micro finance institutions for incremental lending.
She said that that the ECLGS has been announced as part of the Atma Nirbhar Bharat package, which had been announced in May 2020.
Sector-wise details of the scheme will be finalised as per evolving needs, Ms Sitharaman told media persons.