ECLGS borrowers show sound repayment behavior

30 Aug 2022 , 08:03 AM

The emergency credit line guarantee scheme (ECLGS) borrowers who are micro, small, and medium-sized businesses have shown strong repayment habits, with their bad loan ratio being below the industry average.

At the end of March, the NPA for the banking industry 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 were qualified but did not use the service.

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

The program was effective in assisting Indian businesses overcome the Covid-19-related economic crisis and in assisting MSMEs in reviving both during and after the pandemic.

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

Included in this is the most recent addition of an additional Rs50,000 crore, which will be made available to businesses in the hotel and associated industries.

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