NEW DELHI: The newly approved Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 could benefit nearly 1.1 crore MSME accounts by providing additional credit support to businesses affected by the ongoing West Asia conflict, according to a report by the State Bank of India (SBI).The Union Cabinet on Tuesday approved ECLGS 5.0 to offer extra working capital support to existing standard MSMEs and select non-MSME sectors, including airlines.According to the SBI report, “our preliminary estimates indicate that ~1.1 crore MSME accounts (~45% of total MSME portfolio) will be eligible to get benefit from the scheme with per account an average additional credit flow of Rs 2 to 2.3 lakh.” Under ECLGS 5.0, eligible borrowers can avail additional credit of up to 20 per cent of the peak working capital utilised during the fourth quarter of FY26, with a cap of Rs 100 crore.For airlines, the support can go up to 100 per cent of eligible credit, capped at Rs 1,500 crore per borrower.The government has targeted an overall additional credit flow of Rs 2.55 lakh crore under the scheme, including Rs 5,000 crore earmarked for the aviation sector.Highlighting the impact of the move, the report said, “The timely intervention will ensure liquidity support, protect jobs, sustain supply chains, and strengthen the resilience of the Indian economy.” SBI Research noted that previous versions of the ECLGS scheme, introduced during the Covid-19 pandemic, played a key role in stabilising MSMEs and improving their financial health.According to the report, earlier schemes helped prevent at least 13.5 lakh MSME accounts from slipping into non-performing asset (NPA) status.The report also said MSME gross NPAs declined sharply to 3.3 per cent in September 2025 from 11 per cent in March 2020, supported by measures such as ECLGS.The aviation industry is also expected to benefit significantly under ECLGS 5.0 amid rising aviation turbine fuel (ATF) prices and pressure on passenger traffic due to geopolitical tensions in West Asia.SBI Research said outstanding bank credit to the aviation sector stood at Rs 526 billion as of March 2026, marking a 14 per cent year-on-year increase.The report added that if the full Rs 5,000 crore allocation for aviation is disbursed, it would account for nearly 9.5 per cent of the sector’s outstanding bank credit.SBI Research further highlighted strong MSME credit growth during FY26, estimating that MSME credit expanded by around 27 per cent. This pushed the sector’s share in total bank credit to 18.5 per cent, the report added.(With inputs from ANI)