Over 140K guarantees worth ₹1.55 trillion issued under ECLGS 5.0: Govt

The finance ministry said over 140,000 guarantees worth more than Rs 1.55 trillion have been issued under ECLGS 5.0, with MSMEs accounting for the overwhelming majority of beneficiaries

The government has issued more than 140,000 guarantees worth over Rs 1.55 trillion under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, rolled out in May.

 

“True to its design intent, the scheme has overwhelmingly benefited India's small business sector, as 98 per cent of the guarantees have benefited micro, small and medium enterprises (MSMEs),” the finance ministry said in a statement on Tuesday. “Around 82 per cent of the total guaranteed amount is also towards MSMEs.”

 

To maximise awareness and adoption of the scheme, the finance ministry's Department of Financial Services (DFS) led a structured outreach campaign across the country. The department conducted outreach programmes across nine locations between May 20 and June 6 in collaboration with State Level Bankers' Committees (SLBCs), the National Credit Guarantee Trustee Company (NCGTC), banks, industry associations and enterprises. More such programmes are planned at various other locations.

 

 

“These outreach programmes are intended to ensure that eligible borrowers are aware of the scheme and are able to access its benefits, while Member Lending Institutions (MLIs) are equipped to facilitate its effective implementation,” the ministry said in the statement.

 

The Union Cabinet approved ECLGS 5.0 in May with an outlay of Rs 18,100 crore to extend credit support to MSMEs, airlines and other businesses in meeting working capital needs as costs rise amid the West Asia crisis. The scheme aims to help businesses, especially MSMEs and the airline sector, maintain their operations, protect jobs and sustain supply chains. It also aims to unlock an additional credit flow of Rs 2.55 trillion.

 

All loans sanctioned till the end of 2026–27 (Apr–Mar) to help borrowers tide over any short-term liquidity mismatches in view of the war in West Asia are eligible under the scheme. Under the scheme, additional credit of up to 20 per cent of peak working capital utilised during Jan–Mar, up to a limit of Rs 100 crore, is provided as support. Meanwhile, airlines can avail of credit of up to 100 per cent of working capital, subject to a cap of Rs 1,500 crore per borrower.

 

The government launched the first edition of ECLGS in 2020 to provide a 100 per cent guarantee on collateral-free loans to businesses facing a liquidity crisis due to Covid-19.