The Cabinet has approved Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. ECLGS will provide credit guarantee coverage of 100 percent for MSMEs and 90 percent for non-MSMEs as well as airline sector. It will provide credit guarantee coverage through National Credit Guarantee Trustee Company Limited to Member Lending Institutions for extending additional credit support to eligible business borrowers in view of West Asia situation.
ECLGS 5.0 eligible borrowers are MSMEs and non-MSMEs with existing working capital limits. Also eligible are scheduled passenger airlines having outstanding credit facilities as of March 31, 2026, provided their accounts are standard.
ECLGS 5.0 guarantee coverage
100% for MSMEs and 90% for non-MSMEs as well as airline sector.
ECLGS 5.0 Guarantee Fee: Nil
ECLGS 5.0 Quantum of Support
Additional credit up to 20 percent of peak working capital utilised during Q4 FY 26 (capped at Rs.100 crore). For airlines up to 100 percent (capped at Rs 1,500 crore per borrower)
ECLGS 5.0 Loan tenure
For MSMEs/Non MSMEs (except Airline sector): 5 years from the date of first disbursement including moratorium of 1 year.
For airline sector: 7 years from the date of first disbursement including moratorium of 2 years.
ECLGS 5.0 Tenure of Guarantee Cover
Ministry of Finance says that maximum period of guarantee cover shall be co-terminus with the tenor of the loan.
Duration of the Scheme: The Scheme would be applicable to all loans sanctioned during the period from the date of issue of these guidelines by NCGTC upto 31.03.2027
“The scheme aims to enable businesses to tide over the challenges arising from the West Asia conflict. Additionally, this is expected to help businesses maintain their operations, protect jobs, and sustain supply chains. The proposed credit guarantee scheme is a major step to help businesses, particularly MSMEs and airline sector, to ensure their additional working capital needs, are catered by the Banks & FIs. By providing timely liquidity, the scheme will sustain the businesses and prevent job losses. It will also promote uninterrupted domestic production and maintain the resilience of the ecosystem.” Ministry of Finance has said.
