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To 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
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Targets
total additional credit flow of Rs.2,55,000 crore (including Rs.5,000 crore for
airlines)
·
The
Union Cabinet led by Narendra Modi approved Emergency Credit Line Guarantee Scheme (ECLGS) 5.0
on 5 May 2026.
·
The
scheme provides credit
guarantee support to MSMEs, non-MSMEs, and the airline sector
to address liquidity stress due to the West Asia crisis.
·
Guarantee
coverage:
o 100% for MSMEs
o 90% for non-MSMEs and airlines
o Backed by National Credit Guarantee
Trustee Company Limited (NCGTC)
·
No
guarantee fee will
be charged under the scheme.
·
Eligibility:
o Existing borrowers (as of 31 March 2026)
with standard accounts
o Includes scheduled passenger airlines
·
Loan
support:
o Up to 20% of peak working capital (Q4 FY26),
capped at ₹100 crore
o Airlines: up to ₹1,500 crore per borrower
(subject to conditions)
·
Loan
tenure:
o MSMEs & others: 5 years (including
1-year moratorium)
o Airlines: 7 years (including 2-year moratorium)
·
Scheme
duration:
o Applicable for loans sanctioned till 31 March 2027
·
Objective
& impact:
o Help businesses manage short-term liquidity issues
o Protect jobs and maintain supply chains
o Ensure continued production and economic resilience
amid global disruptions
·
Seen
as a targeted relief
measure to stabilize key sectors during geopolitical
uncertainty.
The Union Cabinet chaired by the Prime
Minister Narendra Modi has approved Emergency Credit Line Guarantee Scheme (ECLGS)
5.0 on 5 May, 2026. The scheme aims to provide credit guarantee coverage of 100%
for MSMEs and 90% for non-MSMEs as well as airline sector, to Member Lending Institutions
(MLIs) by National Credit Guarantee Trustee Company Limited (NCGTC) for the amount
in default under the additional credit facility extended to the eligible borrowers
to tide over any short-term liquidity mismatches in view of West Asia Crisis.
Salient features of the scheme:
·
Eligible borrowers: MSMEs and non-MSMEs
with existing working capital limits and scheduled passenger airlines having outstanding
credit facilities, as of March 31, 2026, provided their accounts are standard.
·
Guarantee coverage: 100% for MSMEs and
90% for non-MSMEs as well as airline sector.
·
Guarantee Fee: Nil.
·
Quantum of Support: Additional credit up
to 20% of peak working capital utilised during Q4 FY 26 (capped at Rs.100 crore).
For airlines up to 100% (capped at Rs.1,500 crore per borrower, subject to satisfying
certain specific conditions).
·
Tenor of Loan:
·
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.
·
Tenure of Guarantee Cover: 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
Impact:
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.