Kerala Financial Corporation, a leading State Financial Corporation, will disburse new loans of ₹1,000 crore during this financial year with a view to reviving the industrial sector in the State. This is in addition to the ₹2,450 crore already disbursed, says Tomin J Thachankari, Chairman and Managing Director.

The total disbursement will now go up to ₹3,450 crore, which compares favourably with the ₹1,446 crore lent last year. This is a compelling proposition from the Corporation, Thachankary said, especially when banks and other financial institutions are reluctant to lend generously to the Covid-19-hit industry.

The offer has been sweetened with a generous and simple terms compared to banks. There is no collateral involved, Thachankary said. This makes it easy for less-secure entrepreneurs to access loans. Those who do not own property may provide third party security, and rules have been amended accordingly.

No collateral needed

Loans of up to ₹1 lakh are on offer under the Entrepreneurship Development Scheme without collateral. Over 10,000 applications have been received so far under the scheme, Thachankary said. The 20-per cent ‘Covid additional loan scheme’ for existing entrepreneurs has been extended till March 31 next year.

So far, ₹233 crore has been sanctioned for 379 entrepreneurs under the ‘Covid additional loan’ scheme. Existing entrepreneurs will be given the opportunity to restructure their loans. Interest funding will be provided to convert interest arrears into new loans to repay in installments.

As in the case of banks, the Corporation too has taken a severe hit on business from Covid-19, Thachankary said. While on the one hand there is only meager amount of interest repayment income being realised on a daily basis, on the other, crores of rupees are being through loan disbursements.

Money raised from banks, FIs

“There is a misconception that loans being provided by us are being sourced from the State government. This is wrong. We raise loans from banks and other financial institutions (FIs) for being on-lent. Even during the Covid-19 period, banks did not grant concessions or a moratorium to us,” Thachankary said.

Neither did the Corporation receive any assistance as part of the Central Government scheme for banks that provided for a moratorium and compound-interest concessions. “However, these benefits have been provided to the entrepreneurs by the Corporation,” the Chairman and Managing Director said.

Repayments up

Meanwhile, the Corporation’s loan repayments have gone up after details of defaulters were uploaded to Cibil. In previous months, the repayments would average to around ₹60 crore, but November these cross ₹100 crore after credit information of about 18,500 customers were shared with Cibil.

Thachankary said that credit profiles of as much as 95 per cent of customers were shared with Cibil in this manner. Kerala Financial Corporation is the first financial institution under the State government to transfer personal credit information to Cibil, he added.

Separately, the Corporation has decided to revive lending to films with certain caveats, and would work with the producers’ association with a view to reviving the industry.

This is despite the fact that in the past, most of the loans provided to the industry had become non-performing.

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