India Launches Emergency Credit Scheme for Airlines and MSMEs Amid West Asia Crisis
Airlines, MSMEs to access emergency credit amid West Asia crisis
The Economic Times
Image: The Economic Times
The Indian Union Cabinet has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to assist businesses facing liquidity challenges due to the West Asia crisis. The scheme offers 100% credit guarantee for MSMEs and 90% for airlines, enabling access to additional credit to sustain operations and jobs.
- 01The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 was approved to support businesses amid the West Asia crisis.
- 02MSMEs will receive 100% credit guarantee, while airlines will receive 90% guarantee for additional credit.
- 03Eligible borrowers can access up to ₹100 crore ($12 million USD) for MSMEs and ₹1,500 crore ($180 million USD) for airlines.
- 04The scheme includes a five-year tenure for MSMEs and a seven-year tenure for airlines.
- 05The initiative aims to maintain operations and protect jobs in the affected sectors.
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On Tuesday, the Indian Union Cabinet approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to support businesses facing liquidity stress due to the ongoing West Asia crisis. Information and Broadcasting Minister Ashwini Vaishnaw announced that the scheme will offer 100% credit guarantee for Micro, Small, and Medium Enterprises (MSMEs) and 90% for non-MSMEs and the airline sector through the National Credit Guarantee Trustee Company Limited (NCGTC). Eligible borrowers can access additional credit of up to 20% of peak working capital utilized in the fourth quarter of FY26, capped at ₹100 crore (approximately $12 million USD) for MSMEs and ₹1,500 crore (approximately $180 million USD) for airlines. Loans under this scheme will carry no guarantee fee, with a tenure of five years for MSMEs and seven years for airlines, including moratorium periods. The initiative aims to provide timely liquidity support, maintain operations, protect jobs, and sustain supply chains amidst global disruptions, particularly benefiting the aviation sector and MSMEs.
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This scheme is expected to provide crucial liquidity to MSMEs and airlines, helping them sustain operations and protect jobs during a challenging economic period.
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