ECLGS 5.0 Crosses 1 Lakh Guarantees; CGSMFI-2.0 Extended Till Aug 31: Govt

New Delhi, Jun 11 (KNN) Even as the recently-launched Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 has seen impressive response from firms affected by West Asia crisis, the government has extended the Credit Guarantee Scheme for Microfinance Institutions 2.0 (CGSMFI-2.0) deadline to further ease their financial strain.

The two credit support schemes are expected to provide a cash cushion to businesses, particularly small enterprises, in the face of disruptions caused by the ongoing West Asia crisis.

The combined guarantee coverage under the two credit support schemes now exceeds Rs 49,000 crore.

ECLGS 5.0: Over One Lakh Guarantees in Six Weeks

The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, approved by the Union Cabinet on May 5, has crossed the one lakh guarantee milestone in under six weeks, with 1,06,549 guarantees issued amounting to Rs 48,484.26 crore as of June 9, according to data released by the Ministry of Finance.

The scheme aims to infuse Rs 2,55,000 crore in additional credit to existing borrowers to address liquidity stress arising from disruptions to trade routes and energy supplies linked to the Iran conflict.

Micro, small and medium enterprises (MSMEs) are the primary beneficiaries, accounting for 96 per cent of guarantees by number and 86 per cent of the total guaranteed amount. 

The scheme offers 100 per cent guarantee coverage for MSME borrowers and 90 per cent for non-MSME borrowers, incentivising lenders to extend credit aggressively to the most vulnerable segments. 

CGSMFI-2.0: Microfinance Scheme Extended, Loan Cap Raised

In a separate but complementary move, the government has extended the Credit Guarantee Scheme for Microfinance Institutions 2.0 (CGSMFI-2.0) until August 31, 2026, or until guarantees worth Rs 20,000 crore are issued, whichever comes earlier, the finance ministry said in a release.
Since its introduction on March 20, 2026, loans totalling Rs 770 crore have been sanctioned under the scheme.

To accelerate uptake, the government has raised the maximum loan ceiling for large Non-Banking Financial Companies–Microfinance Institutions (NBFC-MFIs) and MFIs to Rs 1,000 crore from Rs 300 crore, subject to an overall cap of 20 per cent of assets under management.

(KNN Bureau)