ECLGS borrowers show good repayment behavior


Emergency Line of Credit Guarantee Scheme (ECLGS) borrowers who are micro, small and medium enterprises have shown strong repayment habits, with their bad debt ratio being below the industry average.

At the end of March, the NPA of the banking sector was 5.9%.

According to a TransUnion CIBIL report, the NPA rate for borrowers who used the ECLGS facility was 4.8%, which is also lower than the rate (6.1%) for borrowers who qualified but did not not used the service.

According to the survey, 38% of accounts started making payments within three months of using the facility, and that number rose to 82% within a year.

The program has been effective in helping Indian businesses overcome the Covid-19 related economic crisis and in helping MSMEs recover during and after the pandemic.

Based on ECLGS data provided by the National Credit Guarantee Trustee Company, TransUnion CIBIL research. With an investment of Rs5 lakh crore, the ECLGS scheme was introduced in May 2020 and has since been expanded and extended until March 31, 2023.

This includes the most recent addition of an additional Rs50,000 crore, which will be made available to businesses in the hospitality and associated industries.


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