Kerala Financial Corporation, a leading State government-owned financial institution, has launched a new loan scheme to offer loans to agro-based MSMEs at five per cent annual interest rate. Announced by the State Finance Minister KN Balagopal while presenting the Budget 2022-23, the scheme offers loans up to ₹10 crore.
The scheme aims to serve at least 400 MSMEs every year.
According to an official spokesperson, the micro small and medium enterprises (MSMEs) operating in the agro, dairy and animal husbandry-related sectors, agro-based start-ups or those dealing in processing, marketing and trading of agro-based products, food processing units, warehouses, godowns, cold storages and agri infrastructure projects are eligible for loans under the scheme.
Up to 90% of project cost
All financial requirements of the units ranging from setting up of new units, modernisation, expansion and renovation of existing units, purchase of machinery to working capital needs are covered under the scheme, the spokesman added.
Up to 90 per cent of the project cost will be given as loan at a minimum of ₹5 lakh. For loans up to ₹10 crore, the State government has agreed to bear an interest subvention of three per cent and the Corporation will back up with a subvention of two per cent on its own so that customers need to pay only five per cent interest rate.
For larger projects, loans up to ₹10 crore can be allowed with interest subsidies and the balance amount with normal interest.
The maximum repayment period will be 10 years, including a maximum of two years moratorium.
“Agro-based industries play an important role in the overall development of the State’s economy,” said Sanjay Kaul, Chairman and Managing Director, Kerala Financial Corporation.
Almost 40 per cent of the MSMEs are agro-based and hence the scheme will benefit a large section of entrepreneurs, Kaul explained.
The Corporation has also launched a campaign to promote 50 per cent waiver in the processing fee for new MSME loans and a 0.25 per cent interest discount for top-rated clients.