New Delhi. The Central Government has taken an important step to keep the country’s economy stable and strong amid global economic challenges. The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 has been approved in the cabinet meeting chaired by Prime Minister Narendra Modi. The objective of this scheme is to provide financial support to industries, especially the MSME sector, in times of crisis.
Direct benefit to MSME and airline sector
Under the ECLGS 5.0 scheme launched by the government, additional loans will be provided to Micro, Small and Medium Enterprises (MSME) and other industries. In this scheme, MSMEs will be given 100 percent guarantee coverage, while non-MSME and airline sectors will get the benefit of 90 percent guarantee.
What are the eligibility and conditions?
The benefit of this scheme will be available only to those borrowers whose working capital limit is fixed till March 31, 2026 and whose accounts are in regular (non-default) status. This includes MSMEs as well as non-MSMEs and scheduled airlines.
Loan limit and tenure
Under the scheme, companies will be given additional loans up to 20 percent of their maximum working capital, the maximum limit of which has been fixed at Rs 100 crore. Whereas for the airline sector this limit has been kept up to Rs 1,500 crore. The loan period for MSME and other sectors will be 5 years, with a moratorium of 1 year. Moratorium of 7 years and 2 years has been set for the airline sector.
Facility without guarantee fee
A special feature of this scheme is that no guarantee fee will be charged in it, due to which there will be no additional financial burden on the industries. The objective of the government through this scheme is to rescue businesses from economic shocks, protect employment and keep the supply chain strong.
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