New Delhi: The Centre’s Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 is aimed at helping businesses withstand external economic disruptions by facilitating additional working capital of up to ₹2.55 lakh crore, the government said.
Approved on May 5, 2026, the scheme is being implemented by the National Credit Guarantee Trustee Company (NCGTC) and provides government-backed guarantees to Member Lending Institutions (MLIs) for extending additional credit to eligible businesses.
The scheme is designed to ease liquidity pressures, support business continuity, protect employment and help maintain domestic supply chains amid global economic uncertainties.
Who can benefit from ECLGS 5.0?
ECLGS 5.0 covers MSMEs, eligible non-MSME businesses and scheduled passenger airlines. Credit facilities are available through scheduled commercial banks, scheduled urban cooperative banks, financial institutions and eligible NBFCs.
For MSMEs and eligible non-MSMEs, borrowers must have existing working capital facilities with MLIs as of March 31, 2026, with repayments not overdue by more than 60 days.
The scheme covers MSMEs across all sectors. However, certain sectors are excluded for eligible non-MSME borrowers, including NBFCs, power generation/transmission/distribution, telecom service providers, sugar and ethanol, IT companies, paper and paper products, educational institutions, beverages other than tea and coffee, and tobacco.
Eligible MSMEs can receive 100% credit guarantee coverage, while eligible non-MSMEs receive 90% coverage. No guarantee fee is payable by lending institutions.
Loans of up to ₹100 crore for businesses
Under ECLGS 5.0, eligible MSMEs and non-MSMEs can access additional credit of up to 20% of their peak fund-based working capital outstanding during Q4 of FY 2025-26, subject to a ceiling of ₹100 crore per borrower.
The loan has a five-year tenure, including a one-year moratorium. Interest rates are capped at specified levels, with the overall ceiling at 9% per annum for eligible bank lending, while loans from eligible NBFCs cannot exceed 13% per annum.
For scheduled passenger airlines, the scheme provides 90% guarantee coverage and additional credit of up to 100%, subject to a ceiling of ₹1,500 crore per borrower. Any amount above ₹1,000 crore and up to ₹1,500 crore requires a proportionate promoter or owner equity contribution.
Airline loans will have a seven-year tenure, including a two-year moratorium.
6.73 lakh guarantees issued so far
ECLGS 5.0 has recorded strong uptake since its launch. As of August 20, 2026, 6,73,979 guarantees had been issued, covering a guaranteed amount of ₹2,50,024 crore.
MSMEs accounted for 97.3% of guarantees by number and 80.79% of the total guaranteed amount, underlining their dominant share in the scheme.
Eligible businesses can access the scheme through the Jan Samarth Portal, while the government is also conducting outreach campaigns through State Level Bankers’ Committees, banks, NBFCs, industry associations and other stakeholders.
From Covid-era support to broader economic resilience
ECLGS was originally launched in 2020 under the Aatmanirbhar Bharat package to help businesses deal with the financial impact of the Covid-19 pandemic.
The scheme was subsequently expanded through ECLGS 1.0 to 4.0 to cover MSMEs, stressed sectors, healthcare, hospitality, tourism and civil aviation, among others.
Between June 2020 and March 2023, the earlier phases issued 1.19 crore guarantees amounting to ₹3.68 lakh crore.
With ECLGS 5.0, the government is seeking to use the credit guarantee mechanism to strengthen access to institutional finance, preserve jobs and keep businesses and supply chains operational during periods of external economic stress.
The scheme will remain operational until March 31, 2027, or until guarantees worth ₹2.55 lakh crore are issued, whichever is earlier.
