Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 Overview

The Government of India approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 on 5th May 2026 to provide targeted credit guarantee support to businesses affected by external economic disruptions. The scheme, implemented by the National Credit Guarantee Trustee Company (NCGTC), aims to facilitate an additional credit flow of up to ₹2.55 lakh crore and is operational until 31 March 2027 or until the full guarantee amount is utilized, whichever comes earlier.

Scheme Evolution and Background

ECLGS was originally launched in 2020 under the Aatmanirbhar Bharat Package to address COVID-19 pandemic impacts. The scheme has evolved through four previous phases: ECLGS 1.0 covered MSMEs and businesses with loans up to ₹50 crore; ECLGS 2.0 expanded to 26 stressed sectors and healthcare with loans up to ₹500 crore; ECLGS 3.0 extended to hospitality, tourism, and aviation sectors; ECLGS 4.0 focused on healthcare infrastructure. Collectively, these previous phases issued 1.19 crore guarantees amounting to ₹3.68 lakh crore before concluding on 31 March 2023.

Eligibility and Coverage Details

ECLGS 5.0 covers MSMEs across all sectors, eligible non-MSME business borrowers, and scheduled passenger airline companies. Borrowers must have existing working capital facilities as of 31 March 2026 with loan repayments not overdue by more than 60 days. Specific exclusions apply for non-MSME borrowers in sectors including NBFCs, power generation/transmission/distribution, telecom service providers, sugar and ethanol, information technology companies, paper products, educational institutions, and beverages (excluding tea and coffee) and tobacco.

Credit Terms and Conditions

For MSMEs and non-MSMEs, the scheme provides additional credit of up to 20% of the peak fund-based working capital outstanding during Q4 FY 2025-26, subject to a ceiling of ₹100 crore per borrower. MSMEs receive 100% guarantee coverage while non-MSMEs receive 90% coverage. Interest rates are capped at 9% per annum for banks (EBLR/MCLR + 0.75%) and 13% for NBFCs. Loans have a 5-year tenure including a 1-year moratorium period.

For scheduled passenger airlines, the scheme provides additional credit of up to 100% of eligible amounts, subject to a ceiling of ₹1,500 crore per borrower. Amounts beyond ₹1,000 crore require proportionate equity contribution from promoters. Airlines receive 90% guarantee coverage with interest rates determined by lending institutions' board-approved policies. Loans have a 7-year tenure including a 2-year moratorium.

Implementation Progress and Outreach

As of 20 August 2026, the scheme has issued 6,73,979 guarantees amounting to ₹2,50,024 crore. MSMEs account for 97.3% of guarantees by number and 80.79% of the total guaranteed amount. The scheme is accessible through the Jan Samarth Portal (https://www.jansamarth.in/home) with extensive outreach campaigns conducted through State Level Bankers' Committees across 9 locations between 20 May and 6 June 2026, with Phase 2 covering 10 additional locations ongoing.

Institutional Framework

Member Lending Institutions (MLIs) include Public and Private Sector Banks, Small Finance Banks, Foreign Banks, Co-operative Banks, Regional Rural Banks, NBFCs, and Finance Institutions. No guarantee fee is payable by MLIs under the scheme. The scheme aims to strengthen business resilience, preserve employment, maintain supply chains, and sustain India's economic growth momentum during periods of global uncertainty.