Emergency Credit Line Guarantee Scheme (ECLGS)

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Emergency Credit Line Guarantee Scheme (ECLGS)

  • ECLGS has saved around 15 million jobs and stopped 14 percent of outstanding MSME loans from turning into non-performing assets (NPAs) says SBI report
  • It has been one of the government’s key planks in reviving economic activity


  • It was announced in May 2020 as part of the Aatmanirbhar Bharat Abhiyan package
  • Its aim was to alleviate the distress caused by coronavirus-induced lockdown by providing financing to various sectors, particularly Micro, Small, and Medium Enterprises (MSMEs)
  • The National Credit Guarantee Trustee Company provides 100 percent guarantee coverage, whilst banks and non-banking financial companies (NBFCs) supply loans
  • A Guaranteed Emergency Credit Line (GECL) facility will be used to offer the credit
  • NCGTC will not charge Member Lending Institutions (MLIs) any Guarantee Fees under the Scheme
  • Banks and financial institutions will have their interest rates restricted at 9.25 percent, while NBFCs will have their rates regulated at 14 percent


  • It was expanded to Mudra borrowers and Individual loans for commercial purposes in August 2020.
  • It was further extended through ECLGS 2.0 for 26 sectors identified by the Kamath Committee, as well as the Health Care sector, for entities with outstanding credit of more than Rs.50 crore but less than Rs.500 crore, until March 21, for entities with outstanding credit of more than Rs.50 crore but less than Rs.500 crore on November 20

About the report

  • The 1.35 million MSMEs accounts that were saved due to scheme, almost 93.7 per cent are in the micro and small category
  • The trading sector, including small kirana shops, has benefitted the most followed by food processing, textiles and commercial real estate.
  • Gujarat has been the biggest beneficiary, followed by Maharashtra, Tamil Nadu, and Uttar Pradesh amongst the states
  • The scheme had a significant impact on credit flow to the micro segment within MSME.
  • In 2020, MSMEs received higher credit compared to 2019, primarily due to the ECLG scheme