ECLGS - Emergency Credit Line Guarantee Scheme

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ECLGS - Emergency Credit Line Guarantee Scheme
ECLGS - Emergency Credit Line Guarantee Scheme

What is Emergency Credit Line Guarantee Scheme?

The Emergency Credit Line Guarantee Scheme (ECLGS) was launched by the Indian government to support MSMEs during the COVID-19 crisis. It offers additional low-cost credit of up to ₹3 lakh crore through participating banks. The scheme has evolved through versions 1.0, 2.0, and 3.0, each targeting different sectors and loan sizes. ECLGS 1.0 provides 20% extra credit for loans up to ₹50 crore, while 2.0 covers larger loans up to ₹500 crore in specific sectors. ECLGS 3.0 focuses on hospitality and tourism, offering 40% additional credit. The scheme aims to help businesses meet operational costs and restart smoothly after pandemic disruptions.

Benefits you love

Checkout the benefits

  • Additional credit up to ₹3 lakh crore at low cost.

  • Helps MSMEs meet operational liabilities and restart business.

  • Extended tenor and moratorium on principal repayment.

  • Sector-specific support (e.g., hospitality, tourism).

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Benefits you need and deserve

Key features and Benefits

Timely Support

  • Introduced as a specific response to COVID-19 crisis.

  • Extended deadlines for sanctions and fund release.

  • Helps businesses restart smooth functioning.

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Increased Assistance

  • Up to 20% additional credit under ECLGS 1.0 and 2.0.

  • Up to 40% additional credit for specific sectors under ECLGS 3.0.

  • Borrowers can avail remaining 20% if already used ECLGS 1.0 or 2.0.

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Your queries answered here

To apply for ECLGS, eligible businesses should contact their lender (bank or NBFC) and provide the required documents. The lender will assess eligibility and sanction the loan. No fresh collateral is required, and the loan is guaranteed by the National Credit Guarantee Trustee Company (NCGTC).

To apply for ECLGS, businesses need to provide some general documents to their lender which includes:

  • Completely filled MSME application form.

  • Documents required as prescribed by the lender.

  • Management certificate stating the loan is for business purposes, if applying in individual capacity.

ECLGS-1.0 provides an additional 20% of eligible credit up to ₹50 crore for a 4-year tenor with a 1-year moratorium. ECLGS-2.0 offers 20% additional credit for specific sectors with outstanding amounts between ₹50-500 crore for a 5-year tenor with a 1-year moratorium. ECLGS-3.0 provides 40% additional credit up to ₹500 crores for hospitality, travel, tourism, leisure and sporting sectors, with a 6-year tenor and 2-year moratorium. Borrowers who have already availed 20% under ECLGS 1.0 or 2.0 can access the remaining 20% under ECLGS 3.0.

ECLGS eligibility encompasses a range of borrowers across different schemes. ECLGS 1.0 caters to MSMEs, businesses, Mudra borrowers and individuals with business loans up to ₹50 crore. ECLGS 2.0 extends to 26 stressed sectors identified by the Kamath Committee and the healthcare sector, covering loans between ₹50-500 crore. ECLGS 3.0 specifically targets the hospitality, tourism, leisure, sports and aviation sectors.

The Emergency Credit Line Guarantee Scheme (ECLGS) is a credit guarantee program launched by the Government of India in May 2020 as part of the Aatmanirbhar Bharat Abhiyan package to support eligible MSMEs and businesses affected by the COVID-19 pandemic.

Know More about the ECLGS scheme

Terms:

  • Interest rate: Bank external benchmark lending rate, plus 1%.
  • No processing fees, pre-payment penalty, or guarantee fees.
  • Second charge security on assets financed.

For additional information, please contact your Relationship Manager.

For detailed guidelines and FAQs and to access the ECLGS site, click here.

Name different versions of the ECLGS scheme

Here are the different versions of the Emergency Credit Line Guarantee Scheme (ECLGS) offered by HDFC Bank:

  • 1. DECLGS 1.0.
  • 2. DECLGS 2.0.
  • 3. DECLGS 3.0.

What is the purpose of an ECLGS scheme?

The purpose of the ECLGS scheme include:

  • Provide relief to MSME sector during COVID-19.
  • Incentivise lending institutions to offer additional credit.

Enable MSMEs to meet operational liabilities and restart business.

Terms and Conditions

  • The ECLGS 1.0 and 2.0 schemes, initially introduced until March 31, 2021, have been extended. Sanctions are now possible until June 30, 2021, with fund releases allowed until September 30, 2021. This extension allows customers to benefit from all three schemes (ECLGS 1.0, 2.0, and 3.0) until June 30, 2021.
  • HDFC Bank is registered under the trust to provide these schemes to their customers, expanding the reach of the ECLGS program.
  • The security under ECLGS will rank second charge with existing credit facilities in terms of cash flows (including repayments) and security. The charge on assets financed under the Scheme must be created on or before September 30, 2021, or the date of NPA, whichever is earlier.