Small businesses to get help from GECL, PMEGP

Tuesday, Jun 30, 2020 12:45 [IST]

Last Update: Tuesday, Jun 30, 2020 07:06 [IST]

Small businesses to get help from GECL, PMEGP

GANGTOK: The Department of Financial Services (DFS), under Union Finance ministry has recently announced Guaranteed Emergency Credit Line
(GECL) scheme by enhancing the benefit of availing additional 20 percent working capital on outstanding amount. The scheme seeks to help BEs/MSMEs to augment their net worth capital to meet operational liabilities and restart businesses during the Covid-19 pandemic.
Sharing details of the scheme, State Commerce & Industries department secretary H.K. Sharma today told a news conference here that the scheme aims at helping small businesses battling the economic impact of Covid-19 and also includes Pradhan Mantri MUDRA Yojana (PMMY) borrowers. Proprietorship, partnership, registered company, trusts and Limited Liability Partnerships (LLPs) are eligible under the scheme, but only the loans for the business is covered.
The scheme is valid only for existing customers of a bank, NBFC or FI, and not new customers. Also, the loan should be less than or equal to 60 days past due as on February 29, and the borrower should be registered under GST, unless the business is not required to exempted from GST registration, addedState-level bankers committee chief manager Gopal Lama.
The maximum amount eligible under the scheme in form of additional working capital term loan facility and additional term loan facility is set at 20 percent of the total outstanding loans up to Rs. 25 crore as on February 29. The rate of interest is 7.5 percent for public sector and to a maximum of 9.25 percent per annum for private sector banks. NBFCs cannot charge more than 14 percent as interest for the loans under the scheme, he added.
The facility is available from May 23-October 31, and the loans under the scheme is extended for a period of four years from the date of disbursement. There will be no pre-payment charge of a borrower wants to repay early, and there will be no processing fee for the loan.
Lama informed that so far, there are an existing 2,349 borrowers from Sikkim and the sanctioned amount is Rs. 46.41 crore from all existing 160 banks in Sikkim.
Similarly, PMEGP was established in 2008 by the Central government and it came into force in Sikkim in 2008 itself. The Ministry of MSME has simplified the guidelines of PMEGP to streamline the process of selection and examination of the flow of application under the scheme, informed N.K. Sharma.
The role of District Level Task Force Committee (DLTFC) is discontinued for recommendation of proposals/applications to financial banks and it can only monitor the performance of the scheme on quarterly basis. All applications presently available and pending at DLTFC level should be withdrawn by the concerned implementing agencies i.e KVIC, KVIB and DICs and forwarded to the banks for immediate credit decision. The banks will receive the applications directly from the state/district implementing agencies, who will examine and sanction loan as per their rules and norms, informed KVIC director B.N. Roy.
There should be a minimum scoring of 50 out of 100 for the project estimate up to Rs. 0 lakh and minimum 60 out of 100 for projects amounting more than 10 lakh, he added.
The revised guidelines and scoring sheet can be downloaded from the Ministry of MSME website or Commerce and Industries department website, or can be obtained directly from state DIC/KVIC office at Gangtok, it was informed.
The press meet was also attended by MSME director Ravi Kumar and officials from the Reserve Bank of India, Gangtok.
A State-level bankers committee meeting was also convened in the morning to create awareness among MSMEs on the schemes.

Sikkim at a Glance

  • Area: 7096 Sq Kms
  • Capital: Gangtok
  • Altitude: 5,840 ft
  • Population: 6.10 Lakhs
  • Topography: Hilly terrain elevation from 600 to over 28,509 ft above sea level
  • Climate:
  • Summer: Min- 13°C - Max 21°C
  • Winter: Min- 0.48°C - Max 13°C
  • Rainfall: 325 cms per annum
  • Language Spoken: Nepali, Bhutia, Lepcha, Tibetan, English, Hindi