Bhubaneswar: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the rollout of Emergency Credit Line Guarantee Scheme 5.0 (ECLGS 5.0) to provide crucial liquidity support to businesses affected by the ongoing West Asia crisis.
The scheme will offer credit guarantee coverage through the National Credit Guarantee Trustee Company Limited (NCGTC), enabling banks and financial institutions to extend additional credit to eligible borrowers.
Key Features:
-
Eligible Borrowers: MSMEs, non-MSMEs with existing working capital limits, and scheduled passenger airlines with standard loan accounts as of March 31, 2026.
-
Guarantee Coverage:
-
100% for MSMEs
-
90% for non-MSMEs and the airline sector
-
-
Guarantee Fee: Nil
-
Quantum of Support:
-
Up to 20% of peak working capital utilisation in Q4 FY26 (capped at ₹100 crore)
-
For airlines, up to 100% (capped at ₹1,500 crore per borrower, subject to conditions)
-
-
Loan Tenor:
-
5 years (including 1-year moratorium) for MSMEs and non-MSMEs
-
7 years (including 2-year moratorium) for airlines
-
-
Guarantee Duration: Co-terminus with loan tenure
-
Scheme Validity: Applicable to loans sanctioned until March 31, 2027
The scheme is designed to address short-term liquidity mismatches arising from global disruptions, particularly the West Asia conflict. By ensuring access to additional working capital, it aims to help businesses sustain operations, protect employment, and maintain supply chain stability.
Officials said ECLGS 5.0 will play a critical role in preserving economic resilience, especially for MSMEs and the aviation sector, by enabling timely financial support and preventing business disruptions.
-OdishaAge
