Gangtok, 29th June (IPR): A press conference to generate mass awareness on Guaranteed Emergency Credit Line (GECL) scheme and Prime Minister’s Employment Generation Programme (PMEGP) was convened by Secretary, Commerce and Industries Department, Shri H.K. Sharma, at the conference hall of Udyog Bhawan today.
The Secretary was accompanied by Director, State (MSME), Shri M. Ravi Kumar, General Manager and Officer-in-charge, RBI Gangtok Shri Ravindra Sangvai, Chief Manager, Lead Bank, Shri Gopal Lama, AD, Khadi Village and Industries Commission Gangtok, Shri B. N. Roy, and senior officials of the department and other dignitaries.
In his address, Secretary Shri H. K. Sharma highlighting the two schemes said that Guaranteed Emergency Credit Line (GECL) scheme and Prime Minister’s Employment Generation Programme (PMEGP) have been designed by the Government of India in finding solutions to the issues related to MSME.
During the first phase of the conference, Chief Manager, Lead Bank, Shri Gopal Lama, provided a brief introduction on the GECL Product scheme.
It was informed that the GECL scheme is a specific response to the unprecedented COVID-19 crisis. The main objective of the scheme is to provide an incentive to member lending institutions to increase access and enable the availability of additional funding facility to MSME borrowers in view of the economic distress caused by the COVID 19 by giving them 100% guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.
It seeks to provide much-needed relief to the MSME sector setting a pre-approved sanction limit of up to 20% of the loan as on 29th February 2020 through additional working capital term loan facility.
Those business enterprises or MSME having combined outstanding loans across different banks, Non-Banking Financial Companies (NBFCs) and financial institutions (FIs) upto 25 crores as on 29th February 2020 and having the annual turnover up to Rs 1000 crore for the financial year 2020 are eligible for the scheme. The scheme is valid for existing customers of a bank, NBFC or FI and not for new borrowers.
The scheme will be applicable to all loans sanctioned under GECL during the period from 23rd May to 31st October 2020. The rate of interest is 7.5 % for public sector banks and a maximum of 9.25 per annum for private sector banks. NBFCs cannot charge more than 14% interest for the loans under this scheme, it was informed.
The loan is extended for a period of four years from the day of disbursement and there will be no pre-payment charge if a borrower wants to repay earlier without any processing fee for such loans. With a moratorium of one year on the principal repayment, but interest payment will continue during this period while the principal repayment will then be converted into equated instalments spreading across the remaining period of 36 months.
Shri Lama further stated that by supporting MSMEs to continue functioning during the current unprecedented situation, the scheme is also expected to have a positive impact on the economy and support its revival.
The gathering was also briefed on the simplified guidelines of the Prime Minister Employment Generation Programme (PMEGP), a flagship programme of the Ministry of MSME, to streamline the process of selection and examination of the flow of application under PMEGP.
It was also informed that the State and District level implementing agencies namely Khadi Village Industries Commission,(KVIC) Khadi Village Industries Board (KVIB) and District Industries Centres (DICs) will be directly receiving the applications and proposals and will also be scrutinising and forwarding them to the Banks within three weeks of receipt for taking credit decision. The Banks will then examine the project technically and financially and sanction the applications for loans as per their rules and norms.
A scoring sheet system has now been introduced for evaluation of the project by the applicant itself to help them judge their application for funding and further improvisation if needed. It was informed that there should be a minimum scoring of 50 out of 100 for the project estimate up to Rs. 10 lakhs and minimum 60 out of 100 for projects amounting to more than 10 lakhs.
The revised guidelines and the scoring sheet for PMEGP can be downloaded from the Ministry of MSME website or the Commerce and Industries Department, Government of Sikkim webpage or can be directly obtained from State DIC/KVIC office in Gangtok.
Earlier, a new scheme of the Ministry of Food Processing Industries – “PM Formalisation of Micro Food Processing Enterprises (FME)” – under Aatma Nirbhar Bharat Abhiyan was virtually unveiled by Union Minister for Food Processing Industries Smt. Harsimrat Kaur Badal, in the presence of Union Minister of State, FPI, Shri Rameswar Teli.
Director, State MSME, Shri M. Ravi Kumar, along with media personnel also joined the video conference at NIC in Tashiling Secretariat.