India clears $1.9 billion loan guarantee plan as Iran war hurts firms, airlines
The scheme offers 100% guarantee cover for MSMEs and up to 90% for non-MSMEs and airlines, with Rs 2.55 lakh crore in additional credit targeted.
- On Tuesday, the Union Cabinet approved the Emergency Credit Line Guarantee Scheme 5.0, targeting Rs 2.55 lakh crore in additional credit flow, including Rs 5,000 crore for airlines, to address industry distress amid the West Asia conflict.
- Modeled after schemes launched during the Covid-19 pandemic to support the Aatmanirbhar Bharat Abhiyaan, the latest version carries an estimated outlay of Rs 18,000 crore for government credit guarantees.
- The ECLGS 5.0 provides 100% guarantee coverage for MSMEs and 90% for non-MSMEs and airlines, with bank interest rates capped at 9% and NBFCs limited to 13% or 0.75% above benchmark.
- Loans for MSMEs feature a 5-year tenor with a 1-year moratorium, while airlines receive 7 years with a 2-year moratorium; "By providing timely liquidity, the scheme will sustain the businesses and prevent job losses," the Cabinet noted.
- Eligible borrowers with standard accounts as of March 31, 2026, can access funds until March 31, 2027, building on previous guarantee schemes that already supported about 1.1 crore MSMEs with Rs 3.7 lakh crore extended.
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Cabinet clears ₹5,000-crore emergency credit package for passenger airlines
The government has cleared a ₹5,000-crore relief package for Indian passenger airlines hit by rising jet fuel costs and geopolitical disruptions. Eligible airlines can secure up to ₹1,500 crore in credit, benefiting from a seven-year repayment plan with a two-year moratorium.
Cabinet Approves Scheme to Provide Rs 2.55 Lakh Crore Credit Support to Businesses Facing Liquidity Challenges Amid West Asia Crisis
Get latest articles and stories on Business at LatestLY. "The scheme aims to provide credit guarantee coverage of 100% for MSMEs and 90% for non-MSMEs as well as airline sector," the Cabinet said. Business News | Cabinet Approves Scheme to Provide Rs 2.55 Lakh Crore Credit Support to Businesses Facing Liquidity Challenges Amid West Asia Crisis.
Cabinet Approves ECLGS 5.0 to Support Businesses Amid West Asia Crisis
Mumbai : The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 to provide financial relief to businesses impacted by the ongoing West Asia crisis. Under the scheme, the government will offer credit guarantee support through the National Credit Guarantee Trustee Company Limited (NCGTC) to banks and financial institutions, enabling them to extend additional loans to eligible…
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