‘Largest distributor of loans to the distressed MSME sector is the SBI’.


New Delhi: The ailing MSME sector, which had been one of the hardest hit due to the Covid-19 pandemic, has already received more than 50% of the total Rs 3 lakh crore package announced by the Ministry of Finance to help revive the sector.

According to data from the Ministry of Finance and from the Ministry of MSME (Micro, Small and Medium Enterprises), several banks across the country has already sanctioned an amount of Rs 163,103 crore as on 9 September this year that is to be disbursed to the stressed MSME sector.

This Rs 163,103 crore has been sanctioned for 42,01,060 borrowers belonging to the MSME sector, out of which, an amount of Rs 117,885 crore has already been disbursed to 25,01,216 borrowers.

This scheme was brought in by the Ministry of Finance under the 100% Emergency Credit Line Guarantee Scheme (ECLGS) backed by a Government of India guarantee. The ECLGS was announced by the government as a part of the Atmanirbhar Bharat Package, to mitigate the distress caused by the lockdown due to Covid-19 by providing credit to different sectors, especially MSMEs.

The Ministry had asked the banks to identify the companies in the MSME sectors and provide them with loans without any collateral or processing fees. Both the private and the public sector banks have been participating in this scheme which will be open till 31 October this year.

According to the data from the Ministry of Finance, 12 public sector banks, which include the State Bank of India, Punjab National Bank, Canara Bank, Indian Overseas Bank, among others, are participating in this scheme.

The largest distributor of loans under the ECLGS scheme to the distressed MSME sector is the State Bank of India. Till 18 August 2020, it had already sanctioned more than Rs 23,400 crore to several enterprises from the MSME sector. In terms of loan sanction and loan disbursement, the SBI is followed by the Punjab National Bank, Bank of India and the Union Bank of India among public sector banks, while among the private sector banks, HDFC Bank has been very proactively participating in this scheme of the government.

Enterprises from states like Maharashtra, Madhya Pradesh, Andhra Pradesh, Gujarat, Rajasthan and Uttar Pradesh have benefitted the most so far. These are the states where the maximum number of enterprises and loans towards them have been sanctioned so far.

Responding to several questions on the MSME sector in the Lok Sabha, Minister for the MSME Ministry, Nitin Gadkari, in a written reply, said, “A large number of MSMEs have been affected due to Covid-19 induced disruption. Taking into account their hardships, the government announced the Atmanirbhar Package on 13 May 2020, which included various benefits for different sectors, including MSMEs. Some of the prominent initiatives undertaken for the MSME sector include Rs.20,000 crore Subordinate Debt for MSMEs; Rs.3 lakh crore Collateral free Automatic Loans for business, including MSMEs; Rs.50,000 crore equity infusion through MSME Fund of Funds; new revised criteria for classification of MSMEs; new registration of MSMEs through ‘Udyam Registration’ for Ease of Doing Business; no global tenders for procurement up to Rs 200 crore; scheme for easy access to credit for street vendors.”