Interest Subvention Scheme
At a Glance
Scheme Category
Business & Entrepreneurship,Setting up / start-up / entrepreneurship,Loan
Target Beneficiaries
Individual,Industries,Business Entity
Brief Description
The scheme aims to provide institutional credit for capital investments at reasonable interest rates and is implemented through the Karnataka State Financial Corporation (KSFC) in the state.
Benefit Type
Cash
Eligibility Criteria
1. Enterprises promoted by all categories of borrowers, proprietary concerns, partnership firms, companies & other legal entities. 1. The scheme is extended for all new investments in building, plant and machinery directly involved in production by new enterprises and existing enterprises by way of expansion, diversification, modernization and technology up-gradation etc., considering the gross block of plant and machineries. 1. Purchase of land from KIADB / KSSIDC or any other govt. agencies is not available under this scheme. 1. The unit which has already availed the interest subsidy under any other scheme of Government of Karnataka / Government of India are also not eligible for interest subsidy under this scheme. 1. The enterprise will be eligible for 5.5% p.a. interest subvention for a maximum period of five years from the date of first disbursement of respective loans even if the repayment period exceeds beyond five years. Activities covered under this scheme: - Agro & Food Processing, Textile, Ready-made Garments, Engineering, Automobiles, Electrical & Electronics, Paper & Paper Products, Printing & Publishing, Telecommunications, Software & IT related and Wood based activities. Terms and Conditions: - The terms and conditions of loan sanction such as promoters contribution, DER, Security requirement, viability of the project etc., shall be ensured as per the prevailing lending policy of the Corporation.
Application Mode
Offline
Application Process
Step 1: The interested applicant should visit (during office hours) the Branch Office <nis:link nis:type=webUrl nis:id=slugId nis:text="Untitled-1" nis:value=https://ksfc.karnataka.gov.in/storage/pdf-files/SCHEMES/ENG%20SUBVEN%20%20BROU.pdf nis:enabled=true/> and request a hard copy of the prescribed format of the application form from the staff exclusively entrusted to issue and collect filled-in applications. Step 2: In the application form, fill in all the mandatory fields, and attach copies of all the mandatory documents (self-attest, if required). Step 3: Submit the duly filled and signed application form along with the documents to the Branch Office. Step 4: Request a receipt or acknowledgment from the concerned authority to whom the application has been submitted. Ensure that the receipt contains essential details such as the date and time of submission, and a unique identification number (if applicable).
Required Documents
- Passport-size Photograph
- Registration certificate
- PAN Card
- Audited financial statements (if expanding an existing unit)
- Bank account details for loan disbursement
- Any other documents as specified by KSFC during the loan process
FAQs
Who is eligible to apply?
All categories of enterprises including proprietary concerns, partnerships, and companies that are making new investments in building, plant, and machinery for production purposes.
For how long is the interest subvention provided?
The 5.5% interest subvention is provided for a maximum of five years from the first disbursement.
Can enterprises that have availed of other subsidies apply?
No, enterprises that have already received interest subsidies under other schemes from the Government of Karnataka or the Government of India are not eligible.
What are the eligible uses of the loan under this scheme?
The loan can be used for investments in building, plant, and machinery directly involved in production.
Are SC/ST and women entrepreneurs eligible?
If they have already availed of subsidies from other schemes, they are not eligible for this scheme.
Is the purchase of land eligible for the loan?
No, the purchase of land from KIADB, KSSIDC, or any other government agencies is not covered under the scheme.
How is the interest subvention reimbursed?
The Government of Karnataka reimburses the difference between the contract rate and the 5.5% interest subvention.
What happens if I default on the loan repayment?
Enterprises that default on loan repayment will not be eligible to continue receiving the interest subvention.
Can loans be refinanced under this scheme?
No, refinancing or takeover of loans from other banks, NBFCs, or financial institutions is not allowed under this scheme.
What is the term of the loan repayment?
The loan repayment period depends on KSFC policies, but the interest subvention applies for up to 5 years.
What types of enterprises are not eligible for the scheme?
Businesses like trading, hotels, guest houses, restaurants, hospitals, commercial real estate, and certain industrial activities not eligible for incentives under the Karnataka Industrial Policy 2020-25.
Can I receive the loan for multiple projects?
Yes, as long as the total loan does not exceed the specified maximum limits and is for eligible uses.
Can I apply for both new and existing enterprises?
Yes, the scheme is available for both new and existing enterprises that are expanding or modernizing.
How do I ensure that I continue receiving the interest subvention?
You must maintain regular repayment of all KSFC loans to remain eligible for the interest subvention benefit.