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How to Apply for Emergency Credit Line Guarantee Scheme (ECLGS)

The Emergency Credit Line Guarantee Scheme, also known as the ECLGS, was introduced by India’s Ministry of Finance because of the huge amount of economic loss due to the coronavirus COVID-19 pandemic. The Emergency Credit Line Guarantee Scheme is a plan that was a part of the Rs. 20 lakh crore economic package, which included a variety of measures for MSMEs in order to help the businesses for meeting their everyday expenses. The Emergency Credit Line Guarantee Scheme was introduced so that the MSMEs could continue maintaining a certain healthy work capital with a line of credit loan, and had a healthy cash flow.

Features of Emergency Credit Line Guarantee Scheme

The Emergency Credit Line Guarantee Scheme has certain specific features. The features of the Emergency Credit Line Guarantee Scheme have been mentioned in detail below:

  1. Emergency Credit Line Guarantee Scheme is a term loan
  2. The Emergency Credit Line Guarantee Scheme Application is valid till the 31st of October, 2020. The value of the Emergency Credit Line Guarantee Scheme can go upto Rs. 3 lakh crore, which is the threshold amount as stipulated as for the Emergency Credit Line Guarantee Scheme by the Indian government.
  3. The objective or the purpose of the ECLGS has been explained by the government. It has been introduced in order to extend the benefits of the ECLGS to small businesses. The scheme of credit guarantee has been launched through the NCGTC which stands for National Credit Guarantee Trust Company Ltd. It has been designed specifically for existing customers of Bajaj Finance Limited as an additional facility for term loan in the middle of the COVID-19 pandemic crisis.
  4. The tenure of the Emergency Credit Line Guarantee Scheme is of 48 months. During the entire span of the first year, only the interest is to be paid. For each subsequent year, interest is to be paid along with the principal.
  5. To apply for ECLGS, there are certain eligibility criteria that are to be followed. The following are the borrowers that are eligible to apply for ECGLS:
  • Loans that are provided to MSMEs and/or business companies
  •  Any trust or registered company
  • Any Limited Liability Partnership
  • Loans for individuals with different kinds of businesses

How to Apply for the Emergency Credit Line Guarantee Scheme?

The Emergency Credit Line Guarantee Scheme Application includes several reports which further help the ECLGS team in understanding the recently updated numbers achieved under the Emergency Credit Line Guarantee Scheme. The Emergency Credit Line Guarantee Scheme Application is meant only for users who are pre-authorized. The Emergency Credit Line Guarantee Scheme Application is not for new users who wish to sign up for the scheme.

The process of Emergency Credit Line Guarantee Scheme Application  saves a lot of time and is extremely effective for monitoring and reporting.

Application for the ECLGS Scheme

In order to apply for ECLGS, there are certain key factors to be kept in mind. The key factors have been mentioned below:

  • The borrower is required to register for GST or Goods and Services Tax. In any and every case, GST registration is a compulsory factor for any borrower who wishes to apply for ECLGS.
  • A borrower with a status of the SMA-2 and/or NPA as on the 29th of February, 2020 would be ineligible to apply for ECLGS.
  • The interest rate for ECLGS would be 14% per annum.
  • There are zero charges for processing.
  • There is a waiver for the charges of prepayment and/or foreclosure.
  • There are no added collateral requirements. 


  • ✔️What is the ECLGS scheme?

    The ECLGS is a scheme  introduced by the Government of India keeping in mind the COVID-19 crisis. The amount of the emergency credit line to be extended to MSMEs would be 20% of the entire outstanding amount as of the 29th of February, 2020. The tenure for the ECLGS is a total of 4 years. 

  • ✔️What is the GECL scheme?

    The GECL is basically another name for the ECLGS. The GECL or the Guaranteed Emergency Credit Line has a tenure of 48 months. 

  • ✔️What is a credit guarantee scheme?

    A credit guarantee scheme is a scheme that provides third-party credit risk mitigation to lenders by absorbing a part of the lender’s losses due defaults on loans given to SMEs. An example is the GECL launched by the Indian government for small and micro business enterprises. It can be availed by both new and existing enterprises.


  • ✔️What is a guaranteed emergency credit line?

    The Guaranteed Emergency Credit Line, also called the GECL, is a loan that has a tenure of 4 years and for which a complete guarantee of 100% is given by the NCGTC to banks. It is to be extended as a facility of term loan to MSMEs or businesses that are eligible.

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