Under the chairpersonship of the Secretary (Textiles), a brainstorming session on the Credit Access Issues in the Textile Sector was conducted by the Confederation of Indian Textile Industry (CITI) on 15th July 2025, with the goal of examining possible solutions in conjunction with financial, policy, and industry agencies.

A thorough analysis of the textile industry’s credit access problems, particularly those MSMEs encounter, has been conducted by the Ministry of Textiles.

Some of the issues highlighted include:

Banks are not adequately capturing the working capital requirements of the textile industry. To make credit availability more accessible to the textile business, banks must gain a deeper understanding of the lengthy payment cycle, employment work requirements, etc., and other subtleties of the sector.

Given the current rating systems, which are not textile focused, the perception of risk in the textile business has also been a significant disincentive. The Textiles Secretary asked the interested parties to provide a suitable credit rating system tailored to textiles.

It was explained that different funds, such as the water management fund and the energy efficiency fund, are available for different financial needs for sustainable production. For these investments in the textile industry, a unified “Green Fund” was proposed. Members are asked to share their thoughts on the matter.

During the meeting, some recommendations that surfaced were:

A Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) system is in place at the MSME department. Textile MSME use of this grant is minimal because of issues the industry reported accessing it. To better understand its use and improve its efficiency for the textile sector, it was suggested that the expenditures under this fund be monitored.

It was suggested to establish cluster-level credit facilitation centres in response to the recognition of awareness and procedural challenges in obtaining credit schemes. We would appreciate your input on the particular clusters and specifications of the suggested facilitation centre.