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ECLGS 5.0 launched to protect MSMEs with 20% collateral free top ups after Iran war shock
Business
Published on 6 May 2026
Banks can lend again, but the borrower pays no extra fees
India has launched Emergency Credit Line Guarantee Scheme 5.0 to shield MSMEs hit by the Iran war fallout. The programme offers eligible businesses a collateral-free working capital top-up of up to 20% of their prior year peak utilisation, backed by a 100% government guarantee for smaller MSMEs. Loans come with a one-year principal moratorium and five-year repayment tenure.
- MSMEs can get a 20% working capital top-up without new collateral
- Eligibility requires accounts classified as Standard and not NPA tagged
- No guarantee fees are charged, with 100% government guarantee for smaller MSMEs
- Loans allow a one-year principal moratorium and five-year repayment
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This summarization was done by Beige for a story published on 
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