🔆 Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 📍 Why in News? 🟢 The Government approved ECLGS 5.0 on 5 May 2026 to provide government-backed credit support to businesses affected by external economic disruptions. 🟢 The scheme is implemented by the National Credit Guarantee Trustee Company (NCGTC) and aims to facilitate additional credit flow of up to ₹2.55 lakh crore. 📍 What is ECLGS? 🟢 ECLGS was launched in 2020 under the Aatmanirbhar Bharat Package to address financial stress caused by COVID-19. 🟢 It enabled lending institutions to provide additional credit backed by Government guarantees, reducing lenders’ credit risk. 🟢 From ECLGS 1.0–4.0, 1.19 crore guarantees amounting to ₹3.68 lakh crore were issued before the earlier schemes concluded on 31 March 2023. 📍 Key Features of ECLGS 5.0 🟢 Coverage: • MSMEs across all sectors • Eligible non-MSME business borrowers • Scheduled passenger airline companies 🟢 Validity: Operational until 31 March 2027, or until guarantees worth ₹2.55 lakh crore are issued, whichever is earlier. 🟢 Guarantee coverage: • MSMEs — 100% • Eligible non-MSMEs — 90% • Scheduled passenger airlines — 90% • No guarantee fee is payable by Member Lending Institutions. 🟢 Additional credit for MSMEs/non-MSMEs: Up to 20% of peak fund-based working-capital outstanding during Q4 of FY 2025–26, subject to a ceiling of ₹100 crore per borrower. 🟢 Interest rate: • MSMEs — based on EBLR • Eligible non-MSMEs — based on MCLR • Lending institutions can charge up to 0.75% above the benchmark, subject to an overall ceiling of 9% p.a. • Eligible NBFC lending — maximum 13% p.a. Press Release- Press Information Bureau.pdf 🟢 Loan tenure: 5 years, including a 1-year moratorium for MSMEs. 📍 Special Provision for Airlines 🟢 Eligible scheduled passenger airlines can receive 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 proportionate promoter/owner equity contribution. 🟢 Loan tenure is 7 years, including a 2-year moratorium. 📍 Important Exclusions for Eligible Non-MSMEs 🟢 Certain sectors are excluded, including NBFCs, power, telecom, sugar & ethanol, IT, paper & paper products, educational institutions, beverages (except tea and coffee), and tobacco. 📍 Performance So Far 🟢 As of 20 August 2026: • 6,73,979 guarantees issued • Guaranteed amount: ₹2,50,024 crore • MSMEs accounted for 97.3% of guarantees by number and 80.79% by value. 📍 Significance 🟢 Provides liquidity during external economic shocks. 🟢 Supports business continuity and working-capital requirements. 🟢 Helps preserve employment. 🟢 Strengthens domestic production and supply chains. 🟢 Improves access to institutional credit, particularly for MSMEs. #goverment_schemes Join https://t.me/PIB_UPSC https://t.me/upsc_government_scheme
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