Kerala Financial Corporation, a leading State government-owned financial institution, is introducing a new scheme for small and medium sector enterprises offering loans up to ₹1 crore at an interest rate five per cent.

The scheme is sought to be operationalised by tweaking the existing Chief Minister's Entrepreneurship Development Programme that provides up to ₹50 lakh at seven per cent, an official spokesman said,

Government subsidy at 3 per cent

The Government of Kerala will provide a subsidy of three per cent, with the Corporation chipping in with two per cent. The target is to lend to 2,500 enterprises in five years at the rate of 500 enterprises every year, for which the Corporation will set aside ₹300 crore every year.

Aspirant Industrial units must have MSME registration, the spokesman said. The age of the chief entrepreneur should be below 50 years. The age limit for SC/ ST entrepreneurs, women entrepreneurs and non-resident Keralites is 55 years. Loans are available for starting new ventures and modernising existing ones.

Up to 90 per cent of project cost

The loan will be made available up to 90 per cent of the project cost. Large projects will get even higher disbursements, in which cases, loans up to ₹1 crore will be sanctioned at the rate of five per cent and the balance at normal interest rates.

The repayment period is up to 10 years. However, the interest subsidy will be limited to the first five years only. The Corporation will provide specialised training and follow-up services for selected entrepreneurs.

Startups will also benefit under the scheme, the spokesman said. Loans up to ₹1 crore will be available to startups at a rate of 5.6 per cent.

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