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ECLGS 5.0, approved on 5 May 2026, extends government-backed credit guarantees to businesses hit by external economic shocks, targeting an additional credit flow of up to Rs 2.55 lakh crore.
It is run by the National Credit Guarantee Trustee Company (NCGTC) and covers MSMEs, eligible non-MSME borrowers and scheduled passenger airline companies through Member Lending Institutions.
Guarantee cover is 100% for MSMEs and 90% for eligible non-MSMEs and airlines, with no guarantee fee payable by lenders.
As on 20 August 2026, 6,73,979 guarantees worth Rs 2,50,024 crore had been issued; MSMEs accounted for 97.3% of guarantees by number and 80.79% by value.
The scheme runs until 31 March 2027 or until Rs 2.55 lakh crore of guarantees are issued, whichever is earlier.
Relieve COVID-19 liquidity stress for MSMEs, business enterprises, Mudra borrowers and individual business loans
Key: Borrowers with outstanding loans up to Rs 50 crore and up to 60 days past due as on 29 February 2020; 100% government guarantee
Extend cover to larger stressed borrowers
Key: 26 stressed sectors identified by the Kamath Committee plus healthcare; loans above Rs 50 crore and up to Rs 500 crore
Support contact-intensive sectors
Key: Hospitality, travel and tourism, leisure and sporting, and civil aviation — the first entry of airlines into the scheme
Strengthen pandemic-era health infrastructure
Key: Hospitals, nursing homes, clinics, medical colleges and makers of liquid oxygen and oxygen cylinders; 90 days past due cut-off as on 31 March 2021
Cushion businesses against external shocks to supply chains, logistics costs and liquidity
Key: Covers MSMEs, eligible non-MSMEs and scheduled passenger airlines; excludes NBFCs, power, telecom services, sugar and ethanol, IT, paper, educational institutions, beverages (other than tea and coffee) and tobacco on the non-MSME side
Provide collateral-free credit to micro and small enterprises
Key: Trust set up jointly by the Ministry of Micro, Small and Medium Enterprises and SIDBI, launched 30 August 2000; corpus contributed by the Centre and SIDBI in a 4:1 ratio
Guarantee-backed credit for exporters
Key: Borrowers who have already drawn additional credit under CGSE are barred from ECLGS 5.0 to that extent — the two do not stack
Common trustee company for the Centre's credit guarantee funds, incorporated 28 March 2014; operates multiple guarantee programmes including ECLGS under a single umbrella
Administrative department for ECLGS, NCGTC, public sector banks, insurance and pensions
Guarantees collateral-free lending to micro and small enterprises; the older parallel guarantee architecture to NCGTC
Lenders registered under ECLGS 5.0 — public and private sector banks, small finance banks, foreign banks, co-operative banks, regional rural banks, NBFCs and financial institutions
The government, through a trustee company, promises to absorb a defined share of a lender's loss if the borrower defaults. The lender's risk falls, so it lends to borrowers it would otherwise refuse. No money leaves the treasury unless a default occurs.
Simple Analogy: A guarantor co-signs the loan so the bank will say yes.
Defines MSMEs; the composite investment-and-turnover criteria in force since 1 July 2020 decide who gets the 100% cover rather than 90%
RBI-mandated external benchmark for floating-rate retail and micro/small enterprise loans; sets the MSME interest ceiling under ECLGS 5.0
Internal RBI-prescribed reference rate defining a bank's minimum lending rate; the benchmark for eligible non-MSME borrowers here
Eligibility runs on days past due — 60 days for MSMEs and non-MSMEs, and 'Standard' excluding SMA-2 for airlines. SMA-2 means principal or interest overdue for 61 to 90 days; beyond 90 days an account turns NPA
The RBI-appointed committee on resolution of COVID-19 related stress identified the 26 stressed sectors that defined ECLGS 2.0's coverage
Launched 6 June 2022 as the National Portal for Credit Linked Government Schemes; the single digital front-end through which ECLGS and other credit-linked schemes are accessed
The state-level banker coordination forums used to run the scheme's outreach campaigns
Guarantee schemes create contingent liabilities rather than immediate expenditure — a recurring theme in fiscal-policy and Finance Commission questions
GS Paper 3 > Indian Economy > Inclusive Growth, Government Budgeting and Mobilisation of Resources
General Awareness > Government Schemes and Banking Regulation
General Awareness > Economy and Government Schemes
A bank, NBFC or financial institution registered under a guarantee scheme and eligible to claim the guarantee on covered loans
Special Mention Account category where principal or interest is overdue for 61 to 90 days; beyond 90 days the account becomes a Non-Performing Asset
A period during which the borrower repays no principal; interest treatment depends on the scheme's terms
An obligation the government incurs only if a specified event, such as a loan default, actually occurs