The government has approved an Emergency Credit Line Guarantee Scheme (ECLGS 5.0) with an outlay of Rs 18,100 crore to support MSMEs and airlines affected by the West Asia conflict, PTI reported.The scheme is expected to enable additional credit flow of Rs 2.55 lakh crore, including Rs 5,000 crore earmarked for the aviation sector.Giving information to the media, Information and Broadcasting Minister Ashwini Vaishnav said, “This scheme has been brought to remove the tension in the MSME and airline sectors due to the West Asia conflict.”Under the scheme, passenger airlines will be eligible for peak credit of up to 100 per cent with a maximum limit of Rs 1,500 crore, while other institutions can access up to 20 per cent of fund-based working capital up to a limit of Rs 100 crore.The government said the initiative aims to help businesses manage disruptions caused by the conflict, maintain operations and protect jobs.“Additionally, it is expected to help businesses sustain their operations, protect jobs and maintain supply chains. The proposed credit guarantee scheme is a major step forward to help businesses, especially the MSME and airline sector, to ensure that their additional working capital needs are met by banks and financial institutions,” an official release said.The scheme will provide 100 per cent credit guarantee coverage for MSMEs and 90 per cent for non-MSMEs and airlines to lending institutions through the National Credit Guarantee Trustee Company Limited (NCGTC).It is designed to address short-term liquidity mismatches arising from the crisis and ensure uninterrupted domestic production and supply chains.The loan tenure for airlines will be seven years, including a two-year moratorium, while MSMEs and non-MSMEs will get a five-year tenure with a one-year moratorium.The scheme will be applicable to loans sanctioned from the date of notification till March 31, 2027.Civil Aviation Minister K Rammohan Naidu said the move is important for the aviation sector.“This will provide strong financial support to support MSMEs while protecting jobs, maintaining connectivity and ensuring resiliency in the aviation ecosystem,” he said in a post on X.MSMEs and airlines have been under pressure since the Middle East conflict began in February, impacting costs, operations and liquidity.ECLGS was first introduced in May 2020 to support businesses during the COVID-19 pandemic.
