New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to provide additional liquidity support to businesses impacted by the ongoing West Asia crisis.

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Under the scheme, National Credit Guarantee Trustee Company Limited will extend credit guarantee coverage to Member Lending Institutions for additional loans to eligible borrowers. The scheme targets total additional credit flow of Rs 2.55 lakh crore, including Rs 5,000 crore for the airline sector.

ECLGS 5.0 provides 100 percent guarantee coverage for MSMEs and 90 per cent for non-MSMEs and airlines, with no guarantee fee. Eligible borrowers include MSMEs, non-MSMEs and scheduled passenger airlines with standard loan accounts as of March 31, 2026.

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Borrowers can avail additional credit of up to 20 percent of peak working capital utilisation in Q4 FY26, capped at Rs 100 crore, while airlines can avail up to Rs 1,500 crore per borrower under specified conditions. Loan tenure is five years for MSMEs and non-MSMEs with a one-year moratorium, and seven years for airlines with a two-year moratorium.

The scheme will remain open for loans sanctioned up to March 31, 2027, and is aimed at helping businesses manage liquidity challenges, sustain operations and protect jobs amid global uncertainties.

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