ECCO comes under Category II AIF. As per SEBI’s definition, Category II AIF is AIFs that do not fall in Category I and III and which do not undertake leverage or borrowing other than to meet day-to-day operational requirements.
AIFs that invest in a business's unlisted or private space either in debt or equity come under this category. Various types of funds such as;
Real Estate Funds
Credit Opportunities Funds
Private Equity Funds (PE funds)
Funds for Distressed Assets, etc. are registered as Category II AIFs.
ECCO-1 comes under the credit opportunities fund, which is utilized in the form of debt financing to support the business cash flow of Mid-Sized companies.