The National Credit Guarantee Trustee Company Ltd (NCGTC) has disclosed that 1,538 entities have availed of the assistance under Loan Guarantee Scheme for COVID Affected Sectors (LGSCAS), launched by the central government to push healthcare infrastructure development in non-metro regions of the country. Overall, ₹1489.35 crore has been disbursed under LGSCAS till September 30, 2022, NCGTC said in its response to an application filed under the Right to Information Act (RTI).

NCGTC has been set up by the Finance Ministry as a common trustee company to manage and operate various credit guarantee trust funds.

Operational from May 7, 2021, the LGSCAS scheme aims at providing credit guarantee for loans up to ₹50,000 crore for expanding the capacity or setting up the fresh capacity of hospitals, dispensaries, clinics, pathology labs, diagnostic centres etc in regions other than the metro cities. The disbursement figures – an average loan of less than ₹1 crore per entity - indicate that the scheme which allows for credit guarantee for up to ₹100 crore as a loan for a single project, has failed to attract any big-ticket investments in the healthcare sector in non-metro cities of the country.

NCGTC declined to provide a breakup of the loan disbursement, details of the beneficiary entities and the location of the projects citing the clause under the RTI Act which exempts disclosure of information that is commercially sensitive and could harm the competitive position of a third party.

Earlier, the Department of Financial Services under the Finance Ministry had in its annual report indicated that loans amounting to ₹276.48 crores had been sanctioned to98 enterprises under the LGSCAS scheme until November 26, 2021.

The scheme provides a credit guarantee of 50% to all brownfield projects and 75% to all greenfield projects to be set up at centres other than eight metropolitan cities of the country. For aspirational districts, the guarantee cover for both brownfield expansion and greenfield projects is 75%. The interest rate under the scheme is capped at 7.95% per annum during the period of the guarantee cover, ie., up to 2 years from the date of commencement of commercial operations for brownfield projects and up to 5 years from the date of the first disbursement.

Under LGSCAS, banks can also fund eligible projects in the healthcare sector for setting up or expanding medical colleges, manufacturing facilities of vaccines, oxygen, ventilators, priority medical devices and public healthcare facilities in non-metro regions.

The validity of the scheme was originally set to end by March 31, 2022. Recently, the government has extended the validity of LGSCAS till March 31, 2023.

Loan Guarantee Scheme for COVID Affected Sectors (LGSCAS)

1,538 beneficiaries, ₹1,489 cr disbursed under Centre's ₹50,000 cr credit scheme for healthcare