EMERGENCY CREDIT LINE GUARANTEE SCHEME (ECLGS) 5.0

NEWS: Union Cabinet approves Emergency Credit Line Guarantee Scheme (ECLGS) 5.0

Background

• Launched in 2020 under Atma Nirbhar Bharat Package to help MSMEs during COVID-19.
• Provides credit guarantee to banks/lenders to support businesses.
• Implemented by Department of Financial Services (MoF)
• Managed by National Credit Guarantee Trustee Company Ltd (NCGTC)

Objective

• Provide additional credit support to businesses facing liquidity stress due to external shocks (now West Asia crisis).

Key Features

Eligible Borrowers:

• MSMEs, Non-MSMEs, and scheduled passenger airlines
• Must have standard loan accounts as of 31 March 2026

Guarantee Coverage:

• 100% for MSMEs
• 90% for Non-MSMEs & airline sector

Mechanism:

• Government provides guarantee to Member Lending Institutions (MLIs)
• Covers losses in case of default

Significance

• Ensures credit flow without risk to banks
• Supports economic stability & business continuity
• Helps sectors affected by global geopolitical shocks