Key features of the scheme
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- The scheme for emergency credit is called Emergency Credit Line Guarantee Scheme.
- This scheme has been launched in response to economic repercussions caused by Covid-19 pandemic. The main objective of this is to provide relief to the MSME sector by offering credit to meet their liabilities and restart businesses
- This scheme is valid for the duration between 23rd May 2020 and 31st Oct 2020, or until 3 Lakh Crore is sanctioned under the scheme, whichever is earlier.
- This scheme is valid for existing Clix customers that have
- An annual turnover of up to and under Rs 100 Cr for FY20 (As on Mar’2020)
- Total credit exposure across their existing banks and NBFC loan accounts under Rs 25 Cr as of Feb 29’2020
- Borrower accounts should be less than or equal to 60 days past due as on 29th February, 2020 i.e. All loan accounts should not have been classified as SMA 2 or NPA by any of the MLIs as on 29th February, 2020.
- Businesses/MSMEs constituted as proprietorships, partnerships, registered companies, trusts , Society , HUF and LLPs (limited liability partnerships).
- Interested borrowers under PMMY (Pradhan Mantri Mudra Yojana) are also eligible for this facility.
- Borrower must be GST registered in all cases where such registration is mandatory. This condition will not apply to Business Enterprises/MSMEs that are not required to obtain GST registration.Loans provided in individual capacity will not be covered under this scheme
- Under this scheme, borrowers can avail an incremental loan from their existing bank/NBFC of up to 20% of the credit exposure with that bank/NBFC, without providing an NOC (no objection certificate).
- However, borrowers can avail the entire facility (20% incremental loan of overall credit exposure across all their lending institution partners) from a single existing lender, by providing an NOC from all the other lenders.
- At any point, total incremental loan cannot go above 20% of the customer’s net outstanding across all existing lenders as on 29th Feb 2020.
- The tenor of the said loans shall be four years from the date of disbursement of the loan.
- The facility is a loan offer to all the eligible customers, who may choose to accept or opt out the same.
- One year moratorium would be provided on the principal repayment. However, Interest shall be charged and paid every month from the date of disbursement. Remaining interest and principal would be paid back in 36 EMIs after moratorium period is over
- No, this facility has a fixed moratorium period on 12 months only on the principal component. Interest would be payable for the first 12 months. From 13th to 48th month, interest + principal would be payable.
- No processing fee shall be charged by the lenders
- Yes , Facility is available with No foreclosure charges or prepayment penalty .
- Interest rate of emergency credit would be charged @ 14% P.A
- The scheme states that eligible borrowers qualify for up to 20% incremental loan on their existing loan outstanding. Thus actual amount offered can be less and mutually agreed upon between borrower and lender
- No, the scheme only recognizes on balance sheet outstanding loans for the purpose of evaluating eligibility and incremental loan amount
- Loan offered under ECLGS would be under a distinct loan account for the existing borrower.
- No, the credit facility under ECLGS is meant to provide relief in terms of extra credit to restart business and meet obligations. The scheme does not cover any benefits on existing loans.
- The credit under this scheme will rank second charge with the existing credit facilities in terms of cash flows (including repayments) and securities, with charge on the assets financed under the Scheme to be created within a period of 3 months from the date of disbursal.
- No, the scheme only extends to existing borrowers.
- You are eligible only if your account overdue days are less than 60 days
- Yes. Irrespective of the coverage, default and delinquencies have an adverse impact on borrowers’ credit rating and credit score
- The customer shall apply for NOC by writing at email@example.com with subject as ECLGS and existing LAN. In case, Clix is not funding and finds it appropriate, we shall issue the NOC in favor of the lender as requested
- Yes, the lender is supposed to ensure fulfilment of basic criteria as laid under the scheme & also do basic due diligence for sanctioning the loan. Hence, applications may be subject to rejections
- All payments received shall be apportioned towards the dues of existing loan first and then towards loan under this scheme.
If you still have any concerns/queries, reach out to your relationship manager. For more details on the scheme, visit www.eclgs.com