During emergencies such as pandemics and natural disasters, businesses often face financial problems. They struggle to pay employees, manage expenses and continue their operations. To support businesses during the COVID-19 crisis, the Government of India launched the Emergency Credit Line Guarantee Scheme (ECLGS) to provide financial assistance and help businesses recover from losses. The scheme mainly supports MSMEs and other eligible businesses, including those in sectors such as healthcare, tourism, hospitality and aviation.
How will businesses survive during such difficult times?
The government introduced ECLGS in different phases to provide support according to changing needs.
- ECLGS 1.0: Launched in 2020 under the Aatmanirbhar Bharat Package to support MSMEs, small businesses and eligible individual business borrowers.
- ECLGS 2.0 and 3.0: Expanded support to stressed sectors, including healthcare, tourism, hospitality and aviation.
- ECLGS 4.0: Focused on hospitals, medical colleges and oxygen-related manufacturers.
- Overall achievement: Under ECLGS 1.0 to 4.0, around 1.19 crore guarantees worth ₹3.68 lakh crore were issued.
- ECLGS 5.0: Supports eligible businesses and airlines until 31 March 2027, or until the guarantee limit of ₹2.55 lakh crore is reached, whichever comes first.
How does ECLGS 5.0 work?
Eligible businesses can apply through the Jan Samarth portal. The government has set a guarantee limit of ₹2.55 lakh crore, managed through the National Credit Guarantee Trustee Company Limited (NCGTC).
- Maximum loan limit: Up to ₹100 crore per borrower.
- Guarantee coverage: 100% for eligible MSMEs and 90% for eligible non-MSMEs.
- Loan tenure: Up to 5 years.
The main purpose of ECLGS is to help eligible businesses access additional loans, manage financial difficulties, protect jobs and continue their operations during challenging times.
