The Kerala Financial Corporation (KFC) has launched a new loan scheme to help micro, small and medium enterprises (MSMEs) upgrade machinery and equipment. The scheme, announced through a press release, is aimed at supporting well-performing MSMEs to expand, modernise and sharpen their competitive edge.
A key feature is that no collateral security is required. The loans will be covered under the government’s Credit Guarantee Fund.
Under the new scheme, eligible MSMEs can secure loans of up to ₹5 crore, covering as much as 80% of the machinery cost. Repayment can stretch up to seven years, including a one-year moratorium at the start.
Interest rates begin at 5% for units eligible under the Chief Minister’s Entrepreneurship Development Programme (CMEDP). To qualify, the promoter must have a CIBIL score of at least 700, while the MSME’s CIBIL rating should fall between 1 and 5.
KFC has also made it clear that machinery must be sourced from reputed suppliers, with payments made directly to the supplier by the corporation.
Finance minister KN Balagopal said the scheme was designed to ease access to machinery finance for entrepreneurs. By cutting out collateral worries, the government hopes the initiative will encourage investment, strengthen Kerala’s MSME sector and push industrial growth across the state.
KFC managing director Umesh NSK said the machinery loan scheme would give small and medium enterprises a chance to upgrade technology and improve productivity. He added that the initiative is expected to spur innovation, competitiveness and job creation in Kerala’s manufacturing sector.
The scheme may also provide much-needed relief for entrepreneurs facing tight financing conditions, especially those looking to modernise without pledging additional security.
