The Union Cabinet has approved the Emergency Credit Line Guarantee Scheme (ECLGS 5.0) to provide relief to MSME units and the aviation sector. The scheme has been implemented with the objective of reducing the financial pressure arising out of the current global circumstances, particularly the increase in ATF prices, airspace restrictions, and operational challenges.

 

Under this scheme, credit guarantee cover of up to 100 percent for MSME units and up to 90 percent for non-MSME and airline sectors will be provided by the National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs).

 

Additional loans of up to 20 percent of the Peak Working Capital Utilization by MSME units during the fourth quarter of the financial year 2025-26, subject to a maximum limit of Rs 100 crore, may be made available. The guarantee cover on loans sanctioned under the scheme shall remain co-terminus with the loan tenure. The scheme shall apply to loans sanctioned from the date of issuance of guidelines by NCGTC till March 31, 2027, or until guarantees amounting to a total of Rs 2.55 lakh crore are issued, whichever is earlier.

 

The ECLGS 5.0 scheme will prove particularly beneficial for the MSME sector, as eligible MSME units will be provided easy and quick credit assistance without any additional guarantee fee. With the increased availability of working capital through the scheme, micro, small and medium enterprises will receive assistance in overcoming current economic challenges, rising costs, and market-related uncertainties. Along with this, the scheme will help maintain continuity in production, employment generation, and business activities, and will accelerate the industrial and economic development of the state.

Mr. Pranab Kumar Biswas, General Manager, UCO Bank and Convener, State Level Bankers’ Committee (SLBC), ODISHA, informed that an Outreach Programme is proposed to be organized on 03.06.2026 at Pramod Convention, Mahanadi Ring Road, Cuttack, by the Lead District Bank Office, Cuttack, in coordination with DFS, NCGTC, SLBC, Lead Bank and JanSamarth/PSB Alliance for wide publicity of the ECLGS 5.0 scheme and to increase awareness among stakeholders.

He stated that the scheme will prove helpful for MSME units in the state in overcoming short-term liquidity-related challenges, ensuring employment protection, and maintaining continuity in industrial activities. The scheme provides credit guarantee coverage of 100% for MSMEs and 90% for non-MSMEs, including entities in the airline sector, to Member Lending Institutions (MLIs) for the default amount under additional credit facilities extended to eligible borrowers to address short-term liquidity mismatches arising from the West Asia crisis.The scheme offers several attractive features, including attractive interest rates, Nil guarantee fees, No processing charges for sanction of the facility, and no prepayment penalty for early repayment of the loan.

The objective of the programme is to create awareness among banks, MSME units, and other concerned stakeholders regarding the framework, eligibility criteria, benefits, and implementation process of the ECLGS 5.0 scheme, so that the maximum number of eligible units may avail themselves of its benefits.

For more information and to avail benefits under the scheme, interested and eligible units should apply through the JanSamarth Portal by providing the required details in the application form through self-declaration and contacting their respective bank branches.

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Swadhin Shakti Prasad/Manoj Kumar Jali

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