Bhubaneswar: In a bid to ease the interest burden on Micro Small and Medium Enterprises (MSMEs) due to Covid-19 pandemic, the state government has issued operational guidelines to provide interest subvention to such units under Emergency Credit Line Guarantee Scheme (ECLGS).
Under the scheme, the government will provide 5 per cent interest subvention to women-owned MSMEs and 2 per cent to men-owned MSMEs of the state to lessen the burden of interest on an additional loan extended under ECLGS for regular/timely repayment of loans.
The interest subvention will be effective for the financial year (FY) 2020-21. Extension of the scheme for further period may be decided by the state government considering the pandemic situation, said the guidelines.
The MSMEs that are assisted under ECLGS and continuing production/operation will get the benefit, which will not be extended if an MSME shuts operation.
However, if a unit is closed due to situations like natural calamities, shutdown/lockdown due to pandemic situations, lack of electricity, labour issues and for the reason which is beyond the control of the entrepreneur, it can avail the benefits after resumption of production/operation.
As per the guidelines, a women enterprise means an enterprise managed by woman in proprietary concern or in which she/they individually or jointly has/have a share capital of not less than 51 per cent as partner(s).
The bank or financial institution concerned will charge applicable rates of interest on the additional loan. An interest waiver of 5 per cent will be allowed for women-owned MSMEs and 2 per cent for men-owned enterprises while the beneficiary will have to pay the remaining amount of interest.
The nodal bank will release the interest subvention amount to the financing bank branch in favour of the loanee MSMEs. If any amount of the interest subvention is not utilised, the financial institution will have to refund the amount to the nodal bank within 15 days of receipt of funds. Then, the nodal bank will refund the same to the Director of Industries in next 15 days.
In case the government finds any irregularities or fraud, the paid amount will be recovered from the beneficiary. The Aadhaar number of the beneficiary will be linked for extending interest subvention under this scheme.
The Director of Industries has been asked to estimate the requirement of funds and furnish the requisition to the MSME department for placement of funds well in advance for the year.
Chief Minister Naveen Patnaik had announced a stimulus package of `289.42 crore including the interest subvention for MSMEs in December, 2020.