Emergency Credit Line Guarantee Scheme (ECLGS) since its launch, has extended relief to over 1.15 crore Micro, Small and Medium Enterprises (MSMEs) and businesses. It has provided support to eligible borrowers in meeting their operational liabilities and restarting their businesses in the wake of disruptions caused by the COVID-19 pandemic.

As on 24th September 2021, loans sanctioned have crossed ₹ 2.86 lakh crore under the Scheme and out of total guarantees issued, about 95% of the guarantees issued are for loans sanctioned to Micro, Small and Medium Enterprises.

Government has been receiving demands from various Industry bodies and other stakeholders to extend the scheme to ensure continued support to eligible sectors/businesses. With a view to support various businesses impacted by the second wave of COVID 19 pandemic, it has been has decided to extend the timeline of Emergency Credit Line Guarantee Scheme (ECLGS) till 31.03.2022 or till guarantees for an  amount of ₹ 4.5 lakh crore are issued under the scheme, whichever is earlier. Further, the last date of disbursement under the scheme has also been extended  to 30.06. 2022.

The following modifications have been made in the scheme to enable support to businesses impacted by the second wave of COVID

1. Existing borrowers under ECLGS 1.0 & 2.0 would be eligible for additional credit support of upto 10% of total credit outstanding as on 29.02.2020 or 31.03.2021, whichever is higher.

2. Businesses who have not availed assistance under ECLGS (ECLGS 1.0 or 2.0),  can avail credit  support  of upto 30% of their credit outstanding as on 31.03.2021.

3. Businesses in sectors specified under ECLGS 3.0, who have previously not availed ECLGS, can avail credit support up to 40% of their credit outstanding as on 31.03.2021, to the maximum of ₹ 200 crore per borrower;

4. Incremental credit can be availed within these limits by  existing ECLGS borrowers whose eligibility increased because of change in cut off date to 31.03.2021 from 29.02.2020.

5. Accordingly, Borrowers who have availed assistance under ECLGS and whose credit outstanding as on 31.03.2021 (excluding support under ECLGS) is higher than that on 29.02.2020 shall be eligible for incremental support within the cap stipulated under ECLGS 1.0,2.0 or 3.0.

The modification introduced would ensure that businesses adversely impacted by the second wave of COVID 2019 get enhanced collateral free liquidity . Further this provides much needed support to all the ECLGS borrowers (which mainly consist of MSME units) in time for the busy / festival season.

The revised operational guidelines in this regard are being issued separately by National Credit Guarantee Trustee Company Limited (NCGTC).

Emergency Credit Line Guarantee Scheme extension increases collateral-free credit access for eligible businesses with revised percentage caps and deadlines. ECLGS timeline and disbursement deadlines extended to continue support for businesses impacted by the second COVID-19 wave; NCGTC to issue operational guidelines. Existing ECLGS 1.0/2.0 borrowers may obtain additional credit up to 10% of credit outstanding measured at the revised cut-off. Previously unaided businesses may access up to 30% of credit outstanding, while specified sectors may access up to 40%, subject to a per-borrower ceiling. Incremental support is available where outstanding at the revised cut-off exceeds the earlier reference, all within the scheme's overall guarantee cap.