The rate of loan default or NPA under the Emergency Credit Line Guarantee Scheme (ECLGS) introduced after the onset of the Covid-19 pandemic was 4.8 per cent as of March 2022, according to a report.
The Non Performing Assets (NPAs) are higher in the services and infrastructure sectors, which are largely driven by Covid like their contact intensiveness and reliance on movement of people, the report by credit information company Transunion Cibil said.
The government had introduced the scheme to help borrowers tide over the challenges posed by the pandemic by providing a 100 per cent guarantee to lenders with the aim that they extend credit facilities to businesses. It has been expanded and extended till March 2023, and now has an outlay of `5 lakh crore.
The report said the scheme has been successful in helping Indian businesses navigate through the economic crisis caused by Covid-19 at a time when the entire country was put under lockdown.
“At an overall level, NPA rate of the borrowers who availed ECLGS is 4.8 per cent as of March 2022,” the report, which is based on ECLGS data provided by National Credit Guarantee Trustee Company, said. “The timely infusion provided through ECLGS has significantly helped in resurgence of businesses across geographies and at the same time helped in controlling NPAs in MSME lending. The NPA rate of 4.8 per cent for borrowers who availed ECLGS facility is lower than that of the borrowers who were eligible but did not avail the facility (6.1 per cent),” the company’s managing director and chief executive Rajesh Kumar said.