Cabinet approves ECLGS 5.0 to support businesses amid West Asia crisis
Under the scheme, National Credit Guarantee Trustee Company Limited (NCGTC) will offer credit guarantee coverage to Member Lending Institutions. MSMEs will receive 100% guarantee coverage, while non-MSMEs and the airline sector will get 90% coverage on additional loans extended to eligible borrowers.
The scheme covers MSMEs, non-MSMEs, and scheduled passenger airlines with existing loans classified as standard as of March 31, 2026. Borrowers can avail additional credit of up to 20% of their peak working capital used in the fourth quarter of FY26, capped at ₹100 crore. For airlines, support can go up to 100% of eligible credit, capped at ₹1,500 crore per borrower, subject to conditions.
Loan tenure is set at five years for MSMEs and non-MSMEs, including a one-year moratorium. For airlines, the tenure is seven years with a two-year moratorium. Notably, no guarantee fee will be charged, and the guarantee cover will run parallel to the loan duration.
The scheme will remain in effect for loans sanctioned until March 31, 2027.
ECLGS 5.0 is expected to help businesses manage short-term liquidity challenges, maintain operations, protect jobs, and ensure continuity in supply chains, especially for MSMEs and the aviation sector.
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