Emergency Credit Line Guarantees Hit 2.50 Lakh crs
as Govt Moved to Facilitate Easy Finance to MSME
·
Approval & objective: The
Government approved Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 on 5
May 2026 to provide timely working-capital support to businesses facing
geopolitical disruptions, supply-chain issues, higher logistics costs and
liquidity pressures.
·
Implementing agency: The
scheme is implemented by National Credit Guarantee Trustee Company (NCGTC)
through government-backed guarantees to Member Lending Institutions (MLIs).
·
Overall support: ECLGS 5.0 facilitates additional
credit flow of up to ₹2.55 lakh crore.
·
Validity: The scheme will remain
operational until 31 March 2027 or until ₹2.55 lakh crore of
guarantees are issued, whichever is earlier.
Eligible
Borrowers
·
Covers:
o
MSMEs across all sectors
o
Eligible non-MSME business borrowers
o
Scheduled passenger airlines.
·
MSMEs and eligible non-MSMEs must have existing working-capital
facilities as on 31 March 2026, with loan repayments not overdue by more
than 60 days.
·
Businesses that have already availed additional
credit under the Credit Guarantee Scheme for Exporters (CGSE) are
ineligible up to the amount already availed under CGSE.
Sectoral
Exclusions for Non-MSMEs
Eligible
non-MSMEs exclude:
·
NBFCs
·
Power generation, transmission and distribution
·
Telecom service providers
·
Sugar and ethanol
·
IT companies
·
Paper and paper products
·
Educational institutions
·
Beverages, except tea and coffee
·
Tobacco.
Where a business operates in both eligible and
ineligible sectors, eligibility is determined based on the share of turnover
from eligible sectors during FY 2025–26.
Guarantee
& Credit Limits
·
MSMEs: 100% government guarantee.
·
Eligible non-MSMEs: 90%
guarantee.
·
No guarantee fee is payable by MLIs.
·
Additional credit is available up to 20% of peak
fund-based working-capital outstanding during Q4 FY 2025–26, subject to a ₹100
crore ceiling per borrower.
Interest
Rate & Tenure
·
MSMEs: Interest linked to EBLR.
·
Non-MSMEs: Interest linked to MCLR.
·
Lending institutions may charge up to 0.75%
above the benchmark, subject to an overall ceiling of 9% p.a.
·
Eligible NBFCs: maximum interest rate 13% p.a.
·
Loan tenure: 5 years, including a 1-year
moratorium.
Special
Support for Airlines
·
Scheduled passenger airlines with qualifying credit
facilities as on 31 March 2026 are eligible.
·
90% guarantee coverage.
·
Additional credit up to 100%, capped at ₹1,500
crore per borrower.
·
Amount above ₹1,000 crore and up to ₹1,500
crore requires a proportionate promoter/owner equity contribution.
·
7-year tenure, including a 2-year
moratorium.
Progress
as of 20 August 2026
·
6,73,979 guarantees issued.
·
Guaranteed amount reached ₹2,50,024 crore,
already close to the overall ₹2.55 lakh crore ceiling.
·
MSMEs accounted for 97.3% of guarantees by
number and 80.79% of the guaranteed amount.
Access
Eligible borrowers can access the scheme through
the Jan Samarth Portal, with banks and NBFCs serving as participating MLIs.
Bottom line: ECLGS
5.0 is designed as a major liquidity-support mechanism for businesses affected
by external economic and geopolitical disruptions, with ₹2.55 lakh
crore in potential additional credit, particularly benefiting MSMEs and
providing specialised support to scheduled passenger airlines.