ECLGS 5.0 guarantee amount crosses Rs 1.55 lakh crore, benefits 98% of MSMEs

The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 is providing fast, large-scale liquidity support to businesses affected by the geopolitical situation in West Asia.

Since its launch, 4,11,497 guarantees have been issued, with the total guaranteed amount reaching Rs 1.55 lakh crore (Rs 1,55,229 crore), the Ministry of Finance said in a statement.

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The scheme was approved by the Union Cabinet on May 5, 2026, to provide timely liquidity support to businesses impacted by the West Asia geopolitical situation. It is designed to mitigate risks for lending institutions, enabling them to extend additional credit to borrowers and helping businesses overcome cash-flow disruptions and sustain operations.

By extending 100 per cent guarantee coverage for additional loans to MSMEs and 90 per cent coverage for other business segments, the scheme has enabled financial institutions to lend with greater confidence, ensuring that liquidity reaches the sectors most in need.

The scheme has overwhelmingly benefited India’s small business sector, with 98 per cent of all guarantees issued (by number) going to MSMEs. In terms of value, 82 per cent of the total guaranteed amount has been extended to MSMEs.

The Department of Financial Services (DFS) has led a structured outreach campaign across the country in two phases.

Phase I was conducted from May 20 to June 6, 2026, across nine locations through the State Level Bankers’ Committees (SLBCs), with active participation from the National Credit Guarantee Trustee Company (NCGTC), PSB Alliance, banks, industry associations and enterprises.

Phase II is currently underway across 10 locations, of which four have already been completed.

The ECLGS 5.0, with an outlay of Rs 2.55 lakh crore, was rolled out by the government to provide timely support to eligible companies facing higher working capital requirements arising from the impact of the West Asia conflict.

Under the scheme, eligible standard borrowers can avail themselves of incremental funding of up to 20 per cent of their peak working capital in the fourth quarter of the previous financial year, subject to a cap of Rs 100 crore. The loans carry a five-year tenure, including a one-year moratorium.