The Government of India has launched the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to provide crucial liquidity support to micro, small, and medium enterprises (MSMEs), non-MSMEs, and airlines. This initiative comes in response to a slowdown in MSME loan growth and aims to mitigate liquidity stress exacerbated by the West Asia crisis. The scheme offers a 100% guarantee for MSMEs and 90% for non-MSMEs and airlines, with a goal of facilitating an incremental credit flow of ₹2.55 trillion (approximately $30.7 billion USD). It is designed to bolster lender confidence rather than mask underlying asset quality issues. The ECLGS 5.0 allows for loans sanctioned until March 31, 2027, and features no guarantee fees for beneficiaries. Drawing from the success of the original ECLGS introduced during the pandemic, which covered approximately 12 million loans amounting to nearly ₹3.7 trillion, this latest iteration seeks to prevent a tightening of credit conditions that can be hard to reverse. The government hopes that by encouraging lenders to view current disruptions as temporary, it can avert a cycle of credit contraction.