THEBUSINESSBYTES BUREAU

BHUBANESWAR, JUNE 1, 2026

In a significant move aimed at strengthening the Micro, Small and Medium Enterprises (MSME) sector and supporting economic recovery, the Union Cabinet has approved the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, providing enhanced financial assistance to eligible MSMEs and select sectors affected by prevailing global economic challenges.

The scheme has been introduced to ease financial stress arising from factors such as escalating Aviation Turbine Fuel (ATF) prices, airspace restrictions, supply-chain disruptions, and other operational constraints. Under ECLGS 5.0, the National Credit Guarantee Trustee Company Limited (NCGTC) will extend credit guarantee coverage of up to 100 per cent for MSME units and 90 per cent for non-MSME entities, including the aviation sector, to Member Lending Institutions (MLIs).

Eligible MSME units will be able to avail additional loans of up to 20 per cent of their Peak Working Capital Utilisation during the fourth quarter of FY 2025-26, subject to a maximum cap of Rs 100 crore. The guarantee cover under the scheme will remain co-terminus with the loan tenure. The scheme will be applicable to loans sanctioned from the date of issuance of NCGTC guidelines until March 31, 2027, or until guarantees aggregating Rs 2.55 lakh crore are issued, whichever is earlier.

The initiative is expected to provide a major boost to the MSME sector by ensuring quick and hassle-free access to credit without any additional guarantee fee. Enhanced working capital availability is expected to help enterprises tackle rising operational costs, liquidity constraints, and market uncertainties while ensuring continuity in production, employment generation, and business expansion. The scheme is also poised to contribute significantly to industrial growth and economic development across Odisha.

Highlighting the importance of the initiative, Pranab Kumar Biswas, General Manager, UCO Bank, and Convener, State Level Bankers’ Committee (SLBC), Odisha, informed that an extensive Outreach Programme on ECLGS 5.0 will be organised on June 3, 2026, at Pramod Convention, Mahanadi Ring Road, Cuttack. The programme is being jointly coordinated by the Lead District Bank Office, Cuttack, along with the Department of Financial Services (DFS), NCGTC, SLBC, Lead Bank, and JanSamarth/PSB Alliance to create widespread awareness about the scheme and maximise stakeholder participation.

Biswas said that ECLGS 5.0 would help MSME units overcome short-term liquidity challenges, safeguard employment, and sustain industrial operations during uncertain economic conditions. He noted that the scheme offers several attractive features, including 100 per cent credit guarantee coverage for MSMEs, attractive interest rates, zero guarantee fees, no processing charges for sanctioning the facility, and no prepayment penalties for early loan repayment.

The outreach programme aims to familiarise banks, MSMEs, industry representatives, and other stakeholders with the scheme’s framework, eligibility norms, benefits, and implementation process, enabling a larger number of eligible enterprises to access timely financial support.

Interested and eligible units can apply through the JanSamarth Portal by submitting the required details through self-declaration and coordinating with their respective bank branches to avail the benefits of the scheme.

The launch of ECLGS 5.0 is expected to further strengthen the resilience of India's MSME ecosystem, reinforcing its critical role as a driver of employment, entrepreneurship, and economic growth.