India, Sept. 5 -- The Government of India has issued a release:
The ECLGS 5.0 provides targeted credit guarantee support to businesses affected by external disruptions. Implemented by the National Credit Guarantee Trustee Company, the scheme enables eligible lending institutions to extend additional working capital with reduced credit risk. It supports MSMEs, eligible non-MSME businesses and scheduled passenger airlines through government-backed guarantees. Building on the earlier phases of ECLGS introduced during the COVID-19 pandemic, the scheme strengthens access to institutional credit while supporting business continuity. Extensive outreach, digital access through the Jan Samarth Portal and participation of banks and financial institutions have expanded its reach. By improving liquidity, preserving employment and strengthening supply chains, ECLGS 5.0 contributes to business resilience and sustained economic growth during periods of global uncertainty.
MSMEs and Eligible non-MSMEs
Member Lending Institutions (MLIs) are lending institutions registered under ECLGS 5.0 for extending additional credit facilities to eligible borrowers. This includes Public and Private Sector Banks, Small Finance Banks, Foreign Banks, Co-operative Banks, Regional Rural Banks, Non-Banking Financial Companies (NBFCs) and Finance Institutions.
External Benchmark Lending Rate (EBLR) is the benchmark interest rate used by banks to determine floating interest rates on eligible retail and micro and small enterprise loans. The benchmark is set by Reserve Bank of India (RBI).
Scheduled Passenger Airlines
The marginal cost of funds-based lending rate (MCLR) is an internal reference rate for banks fixed by the Reserve Bank of India (RBI). It helps banks to define the minimum interest rate on different types of loans.
Supporting Enterprises During External Economic Shocks
India remains committed to sustaining economic growth, safeguarding livelihoods and ensuring uninterrupted business operations amid evolving geopolitical developments. Such developments can affect supply chains, increase logistics costs and create liquidity pressures for businesses across sectors. To address these challenges, the Government approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 on 5th May 2026.
The scheme is implemented by the National Credit Guarantee Trustee Company (NCGTC). It provides government-backed credit guarantees to Member Lending Institutions (MLIs) for extending additional working capital to eligible business borrowers. It aims to facilitate an additional credit flow of up to Rs.2.55 lakh crore.
The scheme supports uninterrupted domestic production and resilient supply chains. It also helps businesses preserve employment and sustain economic activity during external disruptions. Moreover, enhanced liquidity enables enterprises to meet short-term operational and financial commitments.
Evolution of ECLGS
The ECLGS was launched in 2020 under the Aatmanirbhar Bharat Package. The scheme aimed to help businesses overcome financial stress caused by the COVID-19 pandemic. It enabled MLIs to extend additional credit with 100% Government-backed guarantee support. ECLGS has evolved through successive phases to address the changing needs of different sectors.
Each phase broadened the scheme's coverage in response to evolving economic and sector-specific requirements. From ECLGS 1.0 to 4.0, 1.19 crore guarantees were issued, amounting to Rs.3.68 lakh crore. The schemes subsequently concluded on 31 March 2023.
Salient Features of ECLGS 5.0
ECLGS 5.0 is operational until 31 March 2027, or until guarantees amounting to Rs.2.55 lakh crore are issued, whichever is earlier. It covers MSMEs, eligible non-MSME business borrowers and scheduled passenger airline companies. Borrowers must satisfy the eligibility conditions prescribed by NCGTC, including account status and other applicable lending norms. Credit assistance is provided through Scheduled Commercial Banks, Scheduled Urban Co-operative Banks, Financial Institutions and eligible Non-Banking Financial Companies.
The scheme is available to MSMEs across all sectors. For eligible non-MSME borrowers, certain sectors are excluded from coverage under the scheme. These include Non-Banking Financial Companies (NBFCs), power (Generation, transmission and distribution), telecom service providers, sugar and ethanol, and information technology companies. The list also includes paper and paper products, educational institutions, and beverages (excluding tea and coffee) and tobacco. Where a borrower operates in both eligible and ineligible sectors, the lending institution determines eligibility based on the proportion of turnover generated from eligible sectors during FY 2025-26.
ECLGS 5.0 in Action
ECLGS 5.0 has witnessed encouraging progress since its launch. As on 20 August 2026, 6,73,979 guarantees have been issued under the scheme. The guaranteed amount reached Rs.2,50,024 crore. The strong uptake reflects the scheme's rapid adoption across the lending ecosystem. MSMEs accounted for 97.3% of all guarantees issued by number and 80.79% of the total guaranteed amount.
Eligible borrowers can access the scheme through the Jan Samarth Portal (https://www.jansamarth.in/home). Click here to know how to apply on the portal.
The Government is actively promoting awareness to maximise the scheme's reach.
Sustaining Growth and Enterprise
ECLGS 5.0 reinforces India's commitment to supporting businesses during periods of global uncertainty. It strengthens access to institutional credit through government-backed guarantees. The scheme enables enterprises to continue operations, preserve employment and maintain supply chains. By enhancing business resilience, ECLGS 5.0 contributes to sustaining India's economic growth momentum.
References
Ministry Of Micro, Small and Medium Enterprises
https://sansad.in/getFile/loksabhaquestions/annex/176/AU2801.pdf?sourcepqals
Ministry of Finance
https://financialservices.gov.in/eclgs
https://www.jansamarth.in/emergency-credit-line-guarantee-scheme
https://www.pib.gov.in/PressReleasePage.aspx?PRID2281936&lang1®48
https://www.youtube.com/watch?vwM-1L0ul6c8&featureyoutu.be
National Credit Guarantee Trustee Company Ltd (NCGTC)
https://www.ncgtc.in/en/product-details/ECLGS5/Emergency-Credit-Line-Guarantee-Scheme-(ECLGS)-5.0
https://www.ncgtc.in//content/products/0/20260728/List_of_Member_Lending_Institutions_registered_under_ECLGS_5_0_updated_as_on_28_07_26_0a13e2d38f.pdf
Others
https://x.com/narendramodi/status/2051670602705162419?ref_srctwsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E2051670602705162419%7Ctwgr%5E398fc64675fcb748550d0bb5161b3e6f20122582%7Ctwcon%5Es1_&ref_urlhttps%3A%2F%2Fwww.pmindia.gov.in%2Fen%2Fnews_updates%2Fcabinet-approves-emergency-credit-line-guarantee-scheme-5-0%2F
https://www.pmindia.gov.in/en/news_updates/cabinet-approves-emergency-credit-line-guarantee-scheme-5-0/
https://sbi.bank.in/documents/71595/0/ECLGS+5.0+Operational+Guidelines+dated+08.05.2026.pdf/aa65cd2a-9c1c-ef9c-9508-b0575efec7e9?t1778932400700
https://www.kotak.bank.in/en/stories-in-focus/loans/home-loan/eblr-interest-rate.html
https://www.bajajfinserv.in/understand-eblr-in-home-loan-interest-rate
https://www.icici.bank.in/personal-banking/blogs/loan/personal-loan/what-is-the-mclr-and-how-does-it-affect-the-economy
Emergency Credit Line Guarantee Scheme (ECLGS) 5.0
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