The Government has launched the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to help businesses facing challenges from external economic shocks. Implemented by the National Credit Guarantee Trustee Company, the scheme offers government-backed loan guarantees to support additional working capital. It covers small and medium enterprises, certain larger businesses, and scheduled passenger airlines.
Scheme Details and Eligibility
ECLGS 5.0 became operational on 5 May 2026 and will run until 31 March 2027, or until guarantees worth ₹2.55 lakh crore are issued, whichever comes first. The scheme aims to channel up to ₹2.55 lakh crore in additional credit to eligible borrowers.
Who can apply:
- Micro, Small and Medium Enterprises across all sectors
- Larger businesses in eligible sectors (excluding NBFCs, power, telecom, sugar, IT, paper, educational institutions, beverages except tea and coffee, and tobacco)
- Scheduled passenger airline companies
Borrowers must have had working capital facilities from participating banks or financial institutions as on 31 March 2026, with loan repayments not overdue by more than 60 days.
Guarantee and loan terms:
- MSMEs receive 100% government guarantee; other eligible businesses get 90% guarantee
- Airlines receive 90% guarantee, with up to ₹1,500 crore additional credit available (₹1,000 crore or more requires matching equity from promoters)
- Other borrowers can access up to 20% of their peak working capital from the fourth quarter of FY 2025-26, capped at ₹100 crore
- Loans carry a 5-year tenure with 1-year moratorium for businesses; 7-year tenure with 2-year moratorium for airlines
- Interest rates for MSMEs are based on the External Benchmark Lending Rate plus up to 0.75%, capped at 9% per annum; other businesses pay rates based on the Marginal Cost of Funds-based Lending Rate plus similar margins
- NBFCs can charge up to 13% per annum
Banks and financial institutions pay no guarantee fee under the scheme. Eligible borrowers can apply through the Jan Samarth Portal.
What This Means for You
If you run a small or medium business or work in an eligible sector, you can access additional working capital at regulated interest rates with reduced lending risk to banks. Scheduled passenger airlines can secure larger credit amounts to stabilise operations. By August 2026, nearly 6.74 lakh guarantees worth over ₹2.50 lakh crore had already been issued, showing rapid uptake across the banking system.