SBI to lend Rs 80,000 crore more to war-hit companies

“This scheme is available for everyone and it is an opt-in scheme. We are hopeful that in the next 8 to 10 days implementation issues will be resolved. We are working with various MSME associations on this scheme. Our estimate is that SBI can provide a Rs 70,000 crore to Rs 80,000 crore credit facility through this scheme,” Setty said.

On Wednesday, the Union Cabinet approved ECLGS 5.0 aimed at the country’s micro, small and medium enterprises (MSMEs) and the airline sector, to support these sectors in light of the West Asian conflict. The government said that the latest scheme will enable Rs 2.55 lakh crore in additional credit for eligible business borrowers, including Rs 5,000 crore for airlines facing short-term liquidity stress.

The scheme envisages an additional credit of up to 20% of peak working capital utilised during the fourth quarter of the fiscal year ended March 2026, capped at Rs 100 crore for MSMEs and 100% of working capital for airlines, up to a limit of Rs 1,500 crore per borrower, subject to satisfying certain conditions.

For MSMEs, the tenor of the loan is five years from the date of first disbursement, including a moratorium of one year, while for airlines it is seven years, including a moratorium of two years. Some sectors not impacted by the West Asia crisis have been left out, such as education institutions, defence, horticulture, power, and sugar.

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“This is a proactive measure and the government is clear that there was a substantive scheme which needed to be put in place for MSMEs not to be impacted,” said Financial Services Secretary M Nagaraju.
Earlier on Wednesday, SBI Research said that it expects the scheme to benefit 1.1 crore MSME accounts. “Though it is too early to say about the expected results of ECLGS 5.0…the timely intervention will ensure liquidity support, protect jobs, sustain supply chains, and strengthen the resilience of the Indian economy. Our preliminary estimates indicate that around 1.1 crore MSME accounts (45% of total MSME portfolio) are eligible to get benefit from the scheme, with per account on an average additional credit flow of (Rs 2 to 2.3 lakh),” SBI Research said.