Kerala Financial Corporation registers more than 47% profit increase for financial year 2024
Thiruvananthapuram: Kerala Financial Corporation (KFC), a state-owned industrial financing institution, has passed on a dividend of Rs36 crore to the state government after registering more than 47.5 per cent year-on-year increase in profit of Rs74.04 crore for the fiscal year ending March 2024.
KFC’s loan portfolio exceeded Rs7,000 crore for the first time, reaching Rs7,368 crore while its net worth touched Rs1,064 crore.
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Furthermore, KFC’s gross non-performing assets (NPA) ratio declined to 2.88 per cent from 3.11 per cent in the previous year, while the net NPA ratio stood at 0.68 per cent compared with 0.74 per cent earlier.
At the 71st Annual General Meeting, held in Thiruvananthapuram, KFC declared a dividend of Rs5 per share.
KFC’s 99 per cent shares are held by the state government and the other shareholders are SIDBI, SBI and LIC.
The company disbursed Rs4,068.85 crore in loans during the fiscal year, including Rs726.66 crore under the Chief Minister’s Entrepreneurship Development Programme and Rs72.53 crore in startup loans under the “Startup Kerala” scheme.
A remarkable achievement
Chief Minister Pinarayi Vijayan commended KFC and its customers in a congratulatory message.
“It is a remarkable achievement by KFC. The company has reduced its Gross NPAs to 2.88 per cent. The Chief Minister’s Entrepreneurship Development Programme and initiatives for Startups have contributed to KFC’s outstanding performance. “
Moreover, he said that KFC has received a Rs100 crore share capital infusion from the State Government, which has helped maintain its Capital Adequacy Ratio (CRAR) at 25.52 per cent and increase KFC’s share capital, which was initially five hundred crores, to eight hundred crores by injecting over a hundred crores during the government’s tenure.
“The CRAR is significantly higher than the minimum 15 per cent prescribed for Non-Banking Financial Companies (NBFCs) by the Reserve Bank of India, thereby enhancing the financial stability of KFC.”
Job creation
Government-supported loan schemes like Chief Minister’s Entrepreneurship Development Program (CMEDP) loans of up to Rs2 crore, agro-MSME loans up to Rs10 crore, and startup loans up to Rs10 crore, all provided at low interest rates, enhanced its financial stability, Finance Minister K.N. Balagopal, said.
During the year, KFC approved loans totalling Rs3,336.66 crores for MSMEs, startups, and other sectors, with an overall loan distribution of Rs4,068.85 crores.
Under the CMEDP, a 5 per cent annual profit subsidy at a lower interest rate, has already been provided to 2,648 MSMEs out of a total of Rs726.66 crore in loans given thus far.
KFC’s ‘Startup Kerala’ scheme has disbursed loans to 68 startups totalling Rs72.53 crores. KFC has also significantly facilitated loans for MSMEs and startups in other sectors, contributing to economic growth and job creation in the region.
The corporation’s strong financial performance and initiatives to support small and medium-scale businesses have been praised by the state government.
“The strong financial position of KFC is evident in its effective loan recovery strategies, demonstrated by maintaining net non-performing assets (NPAs) at below one per cent,” Sanjay Kaul, KFC’s Chairman cum Managing Director (CMD), said.
He emphasised the importance of revising loan recovery methods through special recovery drives, resulting in an increase in loan recovery from Rs2,332 crores last year to Rs3,901 crores this fiscal year.
