Rise in MSME Loan Applications under ECLGS 5.0

In view of the Iran–America war, conditions are becoming increasingly difficult for industries. Due to disruptions in the supply of raw materials and chemicals, their prices are witnessing unexpected fluctuations.

Economists are predicting the possibility of a major global economic crisis.

To provide relief to MSMEs from this crisis, the Government of India has launched the ECLGS 5.0 scheme.

Started earlier this month, the scheme aims to provide additional credit support to businesses in managing disruptions arising from the West Asia conflict.

Under the existing norms of the programme, MSMEs are eligible for loans with 100 percent government guarantee, while non-MSMEs are eligible for a 90 percent guarantee.

Borrowers with an existing working capital limit of ₹5 crore can avail additional loans of up to 20 percent of the peak working capital utilized during the fourth quarter of FY26, subject to a maximum limit of ₹100 crore. Under the scheme, the government has targeted a total additional credit flow of ₹2.55 lakh crore.

A senior banker from a public sector bank said, We are receiving a large number of enquiries and applications from MSME customers. However, It is still in the early stages, but the scheme has started gaining traction. People are actively seeking information.

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