Scheme to infuse Rs.255,000cr to existing borrowers
The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, approved by Union Cabinet on 5 May 2026, has reached a total of 106,549 MSMEs with total amount of guarantees at Rs.48,484.26 crore as of 9 June, demonstrating the extensive scale of credit protection being extended to lenders, the Finance Ministry said on 10 June.
Out of the total coverage, 96% of the guarantees issued by number and 86% of the total guaranteed amount belong to the MSME sector. Large participation by Public Sector Banks, accounting for 96% of guarantees, has ensured the quick acceptance of the scheme.
By providing 100% and 90% guarantee coverage to MSME and non-MSME sectors respectively, it has encouraged financial institutions to extend credit aggressively, ensuring that liquidity flows to the sectors that need it most.
The scheme aims to infuse additional credit of Rs.255,000 crore to existing borrower to tide over the liquidity challenges arising due to West Asia crisis, it added.
The following interventions has also contributed to the scheme’s widespread acceptance:
Wide Institutional Participation: The scheme leverages a diverse network of lenders, including PSU Banks, Private Sector Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), and NBFCs, ensuring broad geographical and sectoral reach.
Consistent efforts of Member Lending Institutions (MLIs) to contact the customers through website, emails, SMS, etc to avail the scheme benefits.
DFS facilitated Outreach Programmes at nine locations through SLBCs with participation of NCGTC and PSB Alliance Team along with stakeholders like State MSME and commerce department, banks, industry associations and enterprises. Phase 2 of the outreach programme is under active consideration.
This achievement underscores the government’s commitment to fostering a supportive credit environment. As ECLGS 5.0 continues to evolve, it remains a vital instrument for ensuring financial stability among businesses. Fiinews.com
