Govt clears ₹18,100 crore ECLGS 5.0 to unlock ₹2.55 lakh crore credit for MSMEs, airlines

The Union Cabinet on Tuesday approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 with an outlay of ₹18,100 crore, aimed at supporting MSMEs, airlines and other businesses facing financial stress due to the ongoing West Asia conflict.

The scheme is expected to facilitate additional credit flow of up to ₹2.55 lakh crore, including ₹5,000 crore earmarked for the airline sector.

Briefing reporters after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the scheme has been designed to address liquidity stress in MSMEs and airlines impacted by the crisis.

Under the scheme, the government will provide credit guarantee coverage of 100% for MSMEs and 90% for non-MSMEs and the airline sector to lenders through the National Credit Guarantee Trustee Company Limited (NCGTC). The guarantee will cover defaults on additional credit extended to eligible borrowers.

The scheme will be available to MSMEs, non-MSMEs with existing working capital limits, and scheduled passenger airlines with outstanding credit facilities as of March 31, 2026, provided their accounts are standard.

Eligible borrowers can avail additional credit of up to 20% of peak working capital utilised in the fourth quarter of FY26, capped at ₹100 crore. For airlines, the cap is up to ₹1,500 crore per borrower, subject to conditions.


Loans under the scheme will carry no guarantee fee. The tenure for MSMEs and non-MSMEs will be five years, including a one-year moratorium. For airlines, the tenure will be seven years with a two-year moratorium.

The scheme will apply to loans sanctioned from the date of notification till March 31, 2027, with the guarantee cover aligned to the loan tenure.

The government said the scheme is aimed at helping businesses maintain operations, protect jobs, and sustain supply chains amid global disruptions. It is expected to provide timely liquidity support and ensure continuity in domestic production, particularly for MSMEs and the aviation sector.