The Emergency Credit Line is basically a loan, for which 100% guarantee is provided by the National Credit Guarantee Trustee Company (NCGTC) to Member Lending Institutions (MLIs). MLIs include Scheduled Commercial Banks (SCB) and Financial Institutions (FI) that offer additional working capital loans to existing MSME borrowers under this scheme. NBFCs offer additional term loans to existing MSME borrowers under this scheme. 

The Guarantee Emergency Credit Line (GECL) extends loans upto Rs. 3 Lakhs Crore to eligible MSMEs. MSME/ Business Enterprises that qualify under this scheme include proprietorships, registered companies, partnerships, limited liability partnerships(LLPs), trusts and also interested borrowers under Pradhan Mantri Mudra Yojana (PMMY).

How to apply for it? 

To apply for loans under the Emergency Credit Line, you have to approach your bank/NBFC where you have already taken a loan. The lender will evaluate your eligibility and offer you additional working capital/term loans under this scheme if you’re eligible. 

 You are eligible under the following scenarios:

  • The Scheme is valid only for existing customers on the books of the MLI.
  • Loans under ECLGS are available to all MSME borrower accounts with a combined outstanding loan amount  across all MLIs of up to Rs. 25 crore as on 29.2.2020, and annual turnover of up to Rs. 100 crore for  FY 2019-20. In case accounts for FY 2019-20 that are yet to be audited/finalized, the MLI may rely on the borrower’s declaration of turnover.
  • Borrower accounts should be classified as regular, SMA-0 or SMA-1 as on 29.2.2020. Accounts classified as NPA or SMA-2 as on 29.2.2020 are not eligible under the Scheme.
  • In case when the GST registration is mandatory, the MSME borrower must be GST registered. This condition will not apply to MSMEs as they are not required to oblige with GST registration.
  • Loans provided in individual capacity won't be covered under the scheme.