The Union Cabinet has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to provide additional liquidity support to MSMEs, non-MSMEs and the airline sector affected by the ongoing West Asia crisis.

Under the scheme, the National Credit Guarantee Trustee Company Limited (NCGTC) will provide 100% credit guarantee coverage for MSMEs and 90% coverage for non-MSMEs and airlines on additional loans extended by member lending institutions.

Eligible businesses can avail additional credit of up to 20% of peak working capital utilised during Q4 FY26, capped at Rs 100 crore. For airlines, support of up to Rs 1,500 crore per borrower may be extended subject to specified conditions.

The scheme will not charge any guarantee fee and will remain applicable for loans sanctioned till March 31, 2027.

The government said the initiative is aimed at helping businesses manage liquidity pressures, protect jobs and maintain supply chain stability during the ongoing geopolitical uncertainties.