Industry associations across Tamil Nadu have welcomed the Emergency Credit Line Guarantee Scheme 5.2 approved by the central government. The scheme provides additional credit support up to 20 Percent of working capital for MSMEs and non-MSMEs struggling due to rising raw material prices amid the Iran-Israel war crisis.
Coimbatore: Various industry associations have warmly welcomed the central government's approval of the Emergency Credit Line Guarantee Scheme 5.2, which promises to provide much-needed financial relief to struggling industries across the country.
The South India Textile Research Association Chairman Ravi Sam, Railway Suppliers Association President Surulivel, and Tamil Nadu Solar Power Developers Association Treasurer Sastha Raja jointly expressed their appreciation for the scheme. Speaking about the current challenges, they said, "Due to the Iran-Israel war, raw material prices continue to increase, causing significant struggles for industrial units. Especially micro and small sector industrialists are fighting hard without sufficient working capital."
They added, "In this situation, considering the request from industry associations, the central government has approved the Emergency Credit Line Guarantee Scheme 5.0. On behalf of all industries, we are welcoming it."
The scheme offers several key benefits designed to support businesses during these challenging times. MSMEs and Non-MSMEs with existing working capital limits, as well as scheduled passenger airlines having outstanding credit facilities as of March 31, 2026, are eligible, provided their accounts are standard.
Under the guarantee coverage, MSMEs receive 100 Percent coverage while non-MSMEs and the airline sector receive 90 Percent coverage. Notably, there is no guarantee fee. The quantum of support includes additional credit up to 20 Percentof peak working capital utilized during the fourth quarter of FY 26, capped at Rs.100 crore. For airlines, the support extends up to 100 Percent, capped at Rs.1,500 crore per borrower, subject to satisfying certain specific conditions.
The repayment tenure is set at five years from the date of first disbursement, including a moratorium of one year. For the airline sector, the tenure extends to seven years from the date of first disbursement, including a two-year moratorium.
The maximum period of guarantee cover shall be co-terminus with the tenor of the loan. The scheme will be applicable to all loans sanctioned during the period from the date of issue of these guidelines by NCGTC up to March 31, 2027.
The industry leaders emphasized, "The MSME sector, which plays a main role in the industry, will be more benefited. This initiative will be a big boost for struggling businesses across various sectors." The scheme is expected to provide critical breathing space to industries grappling with rising costs and limited working capital in the current economic climate.
The South India Textile Research Association Chairman Ravi Sam, Railway Suppliers Association President Surulivel, and Tamil Nadu Solar Power Developers Association Treasurer Sastha Raja jointly expressed their appreciation for the scheme. Speaking about the current challenges, they said, "Due to the Iran-Israel war, raw material prices continue to increase, causing significant struggles for industrial units. Especially micro and small sector industrialists are fighting hard without sufficient working capital."
They added, "In this situation, considering the request from industry associations, the central government has approved the Emergency Credit Line Guarantee Scheme 5.0. On behalf of all industries, we are welcoming it."
The scheme offers several key benefits designed to support businesses during these challenging times. MSMEs and Non-MSMEs with existing working capital limits, as well as scheduled passenger airlines having outstanding credit facilities as of March 31, 2026, are eligible, provided their accounts are standard.
Under the guarantee coverage, MSMEs receive 100 Percent coverage while non-MSMEs and the airline sector receive 90 Percent coverage. Notably, there is no guarantee fee. The quantum of support includes additional credit up to 20 Percentof peak working capital utilized during the fourth quarter of FY 26, capped at Rs.100 crore. For airlines, the support extends up to 100 Percent, capped at Rs.1,500 crore per borrower, subject to satisfying certain specific conditions.
The repayment tenure is set at five years from the date of first disbursement, including a moratorium of one year. For the airline sector, the tenure extends to seven years from the date of first disbursement, including a two-year moratorium.
The maximum period of guarantee cover shall be co-terminus with the tenor of the loan. The scheme will be applicable to all loans sanctioned during the period from the date of issue of these guidelines by NCGTC up to March 31, 2027.
The industry leaders emphasized, "The MSME sector, which plays a main role in the industry, will be more benefited. This initiative will be a big boost for struggling businesses across various sectors." The scheme is expected to provide critical breathing space to industries grappling with rising costs and limited working capital in the current economic climate.