THIRUVANANTHAPURAM: The Kerala Financial Corporation (KFC), a government-owned financial institution, has introduced the “KFC Machinery Loan Scheme” for Micro, Small, and Medium Enterprises (MSMEs) to help them purchase new machinery and equipment.
The objective of this scheme is to support well-performing MSMEs in their efforts to expand, modernise, and become more competitive.
A key feature of this scheme is that no collateral is required for availing the loan. The loans are provided without collateral through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Through this scheme, an MSME can avail of a loan of up to Rs5 crore. Up to 80 per cent of the cost of machinery can be financed through the loan. The repayment period is up to 7 years, including a one-year moratorium.
Units eligible under the Chief Minister’s Entrepreneurship Development Programme can avail of loans at reduced interest rates starting from 5 per cent.
Good CIBIL score must
To be eligible, the main promoter of the company must have a CIBIL score of over 700, and the CIBIL rating of the MSME must be between 1 and 5. It is mandatory to purchase machinery from reliable suppliers, and the loan amount will be disbursed directly to the suppliers by KFC.
Finance Minister KN Balagopal stated that the scheme is specifically designed to make it easier for entrepreneurs who face difficulty in providing collateral to modernize their units and thereby grow their businesses. He added that the government envisions that investing in new machinery will strengthen Kerala’s MSME sector and boost the state’s industrial growth.
Umesh NSK IAS, Managing Director of KFC, said the scheme will help small and medium enterprises upgrade their technology and increase production efficiency. He emphasised that KFC aims to encourage modernisation and competitiveness in Kerala’s industrial sector, which in turn will help generate more employment opportunities.
To apply for the loan, units must:
- Be registered under MSME-Udyam and GST,
- Have been in continuous operation for at least three years,
- Have earned a profit in the last two financial years, and
- Have maintained a positive net worth.
Loans will not be granted for the purchase of used, old, or fabricated machinery under this scheme.
A KFC release informed that eligible applicants can apply through the its website (www.kfc.org) or by visiting the nearest KFC branch.
