The coverage will be provided to Member Lending Institutions (MLIs) by National Credit Guarantee Trustee Company Limited (NCGTC) for the amount in default under the additional credit facility extended to the eligible borrowers to tide over any short-term liquidity mismatches in view of West Asia Crisis, according to an official statement.
The MSMEs and non-MSMEs with existing working capital limits and scheduled passenger airlines having outstanding credit facilities, as of 31 March 2026, provided their accounts are standard will be eligible for the scheme.
Additional credit up to 20 per cent of peak working capital utilised during Q4 FY 26 (capped at Rs.100 crore). For airlines up to 100 per cent (capped at Rs.1,500 crore per borrower, subject to satisfying certain specific conditions), the statement said.
For MSMEs and Non MSMEs the tenure will be five years from the date of first disbursement including moratorium of 1 year, while for airline sector it will be 7 years from the date of first disbursement including moratorium of 2 years.
Maximum period of guarantee cover shall be co-terminus with the tenor of the loan. The Scheme would be applicable to all loans sanctioned during the period from the date of issue of these guidelines by NCGTC upto 31.03.2027
The scheme aims to enable businesses to tide over the challenges arising from the West Asia conflict. It targets total additional credit flow of Rs 2,55,000 crore (including Rs 5,000 crore for airlines).
Additionally, it is expected to help businesses maintain their operations, protect jobs, and sustain supply chains. The proposed credit guarantee scheme is a major step to help businesses, particularly MSMEs and airline sector, to ensure their additional working capital needs, are catered by the Banks & financial institutions, the government said.
By providing timely liquidity, the scheme will sustain the businesses and prevent job losses. It will also promote uninterrupted domestic production and maintain the resilience of the ecosystem, it added.
