Credit and Finance for MSMEs: A new loan scheme has been introduced by the state-run, non-banking financial company (NBFC), Kerala Financial Corporation (KFC), to support agro-based industries. Loans up to Rs 10 crore will be available under the scheme at a 5% annual interest rate. The scheme was announced by Finance Minister K. N. Balagopal in the 2022–23 State Budget.
According to the report by The Hindu, MSME units from the following sectors are eligible for loans: agro, dairy, and animal husbandry-related industries; agro-based start-ups; units engaged in processing, marketing and trading of agro-based products; warehouses and godowns; cold storages; and other agri-infrastructure projects.
Loans starting from Rs 5 lakhs will be provided and they can go up to 90% of the project’s cost. The state government would pay a 3 percent interest subsidy on loans up to Rs 10 crore. Additionally, KFC will provide a 2 percent subsidy. As a result, clients will have to pay only 5 percent. With a moratorium of two years, the maximum payback time for the loan will be 10 years. The aim is to give loans to at least 400 MSMEs every year, saw the report.
KFC chairman and managing director Sanjay Kaul said, “Agro-based industries play an important role in contributing to the overall development of the state’s economy. Almost 40% of the MSMEs in Kerala are agro-based, and hence, the scheme will benefit a large section of entrepreneurs.”