Emergency Credit Line Guarantee Scheme (ECLGS) – COVID response Credit Support Scheme

The Emergency Credit Line Guarantee Scheme (ECLGS), was launched by the Government of India in May 2020 as part of the Atmanirbhar Bharat Abhiyan, aimed at providing much-needed liquidity to MSMEs and other businesses during the COVID-19. It enabled 100% guarantee coverage against default to eligible lenders on loan extended to eligible MSMEs / Business Enterprises. 


Key Features:

  1. Provided additional funding in the form of Working Capital Term Loan/Term loan to business adversely affected due to COVID-19

  2. 100% credit guarantee for additional loans without collateral

  3. Covered across four phases (ECLGS 1.0 to 4.0) with evolving eligibility criteria and sector-specific focus

  4. Tenure: 4–6 years depending on the phase

  5. Moratorium: 12–24 months on principal repayment

  6. Interest rate caps:

    1. 9.25% for banks/FIs

    2. 14% for NBFCs

  7. Zero charges: No processing fees, no guarantee fees, no prepayment/foreclosure penalties

  8. Loan eligibility: 20%–50% of the outstanding loan as on 29.02.2020 / 31.03.2021 / 31.01.2022

  9. Over ₹3.6 lakh crore guaranteed


ECLGS played a critical role in keeping businesses afloat during the pandemic, enabling survival, recovery, and employment protection across sectors.


For more: Emergency Credit Line Guarantee Scheme

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