Bhubaneswar: The State Government has issued operational guidelines to provide interest subvention to such units under the Emergency Credit Line Guarantee Scheme (ECLGS).
The Micro, Small and Medium Enterprises (MSME) Principal Secretary Satyabrata Sahu has issued the guidelines on Tuesday that will be applicable for the whole of the State.
MSME sector contributes significantly to the employment generation, value addition of local resources, exports and also in ruction of regional imbalances.
In order to facilitate the credit linkage with Banks and lessen the burden of interest on additional loan (additional working capital and or additional term loan extended by Banks & Financial Institutions and additional term loan extended by Non-Banking Financial Companies (NBFCs), the Government of Odisha declared the scheme.
Under the scheme, the Government will provide interest subvention of 5 per cent for women-owned MSMEs and 2 per cent for men-owned MSMEs of the State to lessen the burden of interest on additional loan extended under ECLGS for regular/timely repayment of loan.
The interest subvention will be applicable for the Financial Year 2020-21. Extension of the scheme for a further period may be decided by the State Government considering the pandemic Covid-19 situation, the guidelines said.
The interest subvention shall be made available to MSMEs extended with additional loan by Banks & Financial Institutions and Non-Banking Financial Companies (NBFCs) under the Emergency Credit Line Guarantee Scheme.
The MSMEs assisted under ECLGS and continue its production/operation will get the benefit while the benefit will not be extended if the MSME goes out of production /operation.
However, exceptions will be given if the unit is closed due to situations like natural calamities, shutdown/ lockdown due to pandemic situations, want of electricity, labour trouble and for reasons beyond the control of entrepreneur /management. The interest subvention will be extended on resumption of production or operation.
As per the guidelines, women enterprise means enterprise managed by woman in proprietary concern or in which she /they individually or jointly has or have a share capital of not less than 51 percent as partner(s).
Further, the documentation for availing additional working capital and or additional term loan under ECLGS with Banks/Financial Institutions/Non-Banking Financial Companies (NBFCs) should be in the name of women entrepreneur or the women entrepreneur nominated by MSME to sign the cheques and transaction with the Financial Institutions.
Negative list under the extant policy provisions shall not be applicable under the present Scheme of Interest Subvention.
The concerned Bank/Financial Institution/Non-Banking Financial Companies (NBFCs) will charge an applicable rate of interest on the additional loan. Out of the charged applicable rate of interest, interest subvention will be claimed at a rate of 5 per cent for women-owned MSMEs and 2 per cent for men—owned MSMEs and the rest of interest shall be paid by the beneficiary.
The MSME Department in consultation with the Director of Industries will identify the nodal bank(s) at State level for this purpose.
After disbursement of loan installment, the concerned Bank/ NBFC will intimate interest subvention claim to the Nodal Bank under intimation to the concerned RIC /DIC at the end of each quarter in the prescribed format.
The interest subvention may be claimed during moratorium period. After the moratorium period, it shall be claimed if the loan dues/installments are paid by the entrepreneur regularly/within due time as per bank /NBFC norms.
The claim for interest subvention shall exclude penal interest etc and be allowed on issue of a certificate by the Bank to the effect of no over dues and regular/timely repayment of loan.
The nodal bank will release the interest subvention amount to the financing Bank Branch/ NBFC in favour of the loanee MSMEs under intimation to concerned RIC/DIC.
General Manager, Regional Industries Centre (RIC), District Industries Centre (DIC) will have to report the continuation of production/operation of assisted MSMEs to the concern financial institution in every quarter.
If, any amount of the interest subvention is not utilized, the financial institution will have to refund the amount to the nodal bank within next 15 days of receipt of funds. Then, the nodal bank will refund the same to the Director of Industries through electronics mode within next 15 days of receipt of funds.
In case the Government found 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. After that the Department will place the funds with Nodal Banks through Directorate of Industries, Odisha.
