MSME body CIMSME requests RBI to extend repayment period under ECLGS
CIMSME urged for extension of repayment under ECLGS 1.0 from three to five years after the moratorium period. It also requested the extension for all MSMEs without any restriction.
Chamber of Indian Micro, Small & Medium Enterprises (CIMSME) has written a letter to Reserve Bank of India (RBI) Governor Shaktikanta Das requesting the extension of the repayment period under the Emergency Credit Line Guarantee Scheme (ECLGS) 1.0 from three to five years after the moratorium period and extension of the same to all MSMEs without restrictions.
Mukesh Mohan Gupta, President, CIMSME stated that, due to COVID-19 the cost of production has increased due to the increased time for procuring raw materials and conversion into finished products. Lack of labour and end-use of ECLGS for fixed expenses hit the profitability of MSMEs and they would not be in a position to repay this credit in three years after the moratorium period. The MSME body, representing over 1 lakh MSMEs, insisted on a centralised loan application portal for the Subordinate Debt Scheme launched by the government as part of the Atmanirbhar package.
The government recently extended the ECLGS 1.0 moratorium period for interest payment to two years while the period for repaying the principal and interest was three years. This scheme is currently applicable to borrowers eligible for loan restructuring as per RBI guidelines dated May 5, 2021.
Source – Financial Express