Chennai, Jun 27 (KNN) Loans worth Rs 432 crore have been disbursed to 2,881 Micro, Small and Medium Enterprises (MSMEs) in Tiruppur district under Emergency Credit Line Guarantee Scheme (ECLGS), said District Collector K Vijayakarthikeyan.

According to a press communique on Friday, the Collector presided over a meeting with representatives of MSMEs, banks and district administration officials to discuss the practical difficulties in the MSME units receiving these loans from banks and how to rectify these issues.

''The rest of the MSME units in the district will receive the 20% loan,'' said Vijayakarthikeyan.

In a bid to compete with the global market, the representatives were also asked to increase production, improve the product quality and reduce the expenses.

In May, the Central government announced the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme for MSMEs to mitigate the economic distress due to the COVID-19 lockdown.

Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility.

The government will also provide a corpus of Rs 41,600 crore for the scheme over the current and coming three financial years.

'The main objective of the Scheme is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and Non-Banking Financial Companies (NBFCs) to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers,'' the government had said.

'The collateral free loans are for those with Rs 25 crore outstanding loan or Rs 100 crore turnover. The tenure of the loan will be 4-year and moratorium of 12 months,' said Finance Minister Nirmala Sitharaman.