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Emergency Credit Line Guarantee Scheme (ECLGS)

To counter the ill-effects of COVID-19, the government of India has provided a 100% guarantee to banks and financial institutions to be able to provide support for businesses and MSMEs to facilitate additional loans or additional working capital requirements of companies.

Features of ECLGS Scheme

The features of  Emergency Credit Line Guarantee Scheme (ECLGS) are as follows:

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    Emergency credit line- The amount of emergency credit line to be extended to Business Enterprises/MSMEs would be upto 20% of total outstanding as on Feb 29,2020

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    100% guarantee coverage for the additional funds sanctioned under the Emergency Credit line scheme

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    Eligible borrower- Business Enterprises/MSMEs with outstanding loan of upto Rs. 50 crores as on February 29, 2020 and turnover of upto Rs. 250 crores in FY 2019-20

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    Interest rate- Interest rate charged is capped at 9.25% for banks and 14% for NBFCs (subject to change)

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    Tenure- Maximum tenure of 4 years from the date of disbursement

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    Moratorium- Moratorium period on principal amount is 12 months

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    Charges- No charges/ guarantee fees is to be charged by MLIs/NCGTC

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