The textile industry and MSMEs in Coimbatore welcomed the Emergency Credit Linked Guarantee Scheme (ECLGS), saying it will provide liquidity support.

The major hindrance faced by the textile industry has been the lack of adequate working capital to sustain manufacturing capacity, retain workforce, procure essential inputs and service bank loans, said chairperson of the Southern India Mills Association Durai Palanisamy. 

Introduction of ECLGS 5.0. is a timely and much-needed initiative that will provide additional liquidity support to businesses impacted by recent global disruptions, particularly the West Asia crisis, he said.

The scheme extends support to MSME and non-MSME sectors, with a tenure of up to five years and availability for loan sanction up to March 31 next year along with a moratorium of one year on principal repayment. The scheme provides additional credit of up to 20% of the peak working capital as of fourth quarter of 2025-2026 subject to a maximum cap of ₹100 crore per borrower. The facility is fully collateral-free and carries no guarantee fee.

The ECLGS scheme, coupled with the TEEM scheme and the Mission for Cotton Productivity with an outlay of ₹5,659.22 crore approved by the Cabinet in the recent Union Budget, will provide a strong impetus to the growth of the industry and enhance its competitiveness in both global and domestic markets, he said.

Coimbatore District Small Industries Association president M. Karthikeyan said the scheme would provide much-needed financial support to businesses, especially MSMEs during the current challenging global conditions. The provision of ₹2.55 lakh crore credit under the scheme will help businesses overcome cash flow difficulties. 

With 7.34 crore MSMEs operating across the country, CODISSIA urged Prime Minister Narendra Modi to consider increasing the scheme’s credit allocation from ₹2.55 lakh crore to ₹6.5 lakh crore.