Kerala Financial Corporation, a leading government-owned financial institution, has enhanced the upper loan limit of loans under the Chief Minister’s Entrepreneurship Development Programme (CMEDP) to ₹2 crore so that more Micro, Small and Medium Sector enterprises (MSMEs) can hope to get funds at a concessional five per cent interest rate. A decision to this effect was taken after the State government issued an order in this regard, which is in line with Finance Minister KN Balagopal’s announcement while presenting the Budget 2022-23. The Government of Kerala will provide a subsidy of three per cent with the Corporation chipping in with two per cent towards the effective interest rate.

Government subsidy

An official spokesman said the Corporation has so far assisted a total of 2,122 units under the scheme. The target is to lend to 2,500 enterprises in five years at the rate of 500 enterprises every year, for which it will set aside ₹500 crore every year. Aspirant industrial units must have an MSME registration and 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 as well as for modernising existing ones.

Up to 90% 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 case loans up to ₹2 crore will be sanctioned at the rate of five per cent and the balance at normal rates. The repayment period is up to 10 years but the interest subsidy will be limited to the first five years. The Corporation has also launched a business campaign offering 50 per cent waiver in the processing fees for new MSME loans and 0.25 per cent interest discount for top-rated clients as part of the International MSME Day celebrations.

Related Topics
comment COMMENT NOW