This scheme, approved by the Union Cabinet on May 5, 2026, was launched to offer supplementary credit assistance to businesses impacted by geopolitical developments in West Asia.
It provides a 100% government guarantee on extra loans given to micro, small, and medium enterprises (MSMEs), along with a 90% guarantee for qualifying borrowers in other sectors.
The Department of Financial Services (DFS) has stated that 4.11 lakh guarantees have been issued under ECLGS 5.0, encompassing a guaranteed sum of ₹1.5 lakh crore.
MSMEs have comprised the majority of the beneficiaries under this scheme. According to the ministry, 98% of the guarantees issued, in terms of numbers, have been allocated to MSMEs, which represent 82% of the total guaranteed amount approved under the initiative.
The government emphasized that the scheme is designed to assist businesses in managing cash flow challenges by allowing banks and other lending agencies to provide additional credit, supported by sovereign-backed guarantees.
In efforts to enhance awareness and execution, the DFS has been executing outreach programs through State Level Bankers’ Committees (SLBCs), in partnership with the National Credit Guarantee Trustee Company (NCGTC), financial institutions, industry organizations, and other involved parties.
The first phase of the outreach campaign took place between May 20 and June 6 across nine locations. The second phase is currently ongoing at ten locations, with events having been completed at four sites thus far, as indicated by the ministry.
The government mentioned that these outreach initiatives aim to assist eligible borrowers in comprehending the scheme and to ensure a smoother implementation process by participating lending institutions.
First Published: Jul 7, 2026 2:33 PM IST
