KN Balagopal, Finance Minister | Photo Credit: MAHINSHA S

The Kerala Financial Corporation has launched a new loan scheme -- KFC Machinery Loan Scheme for MSME -- to help purchase new machinery and equipment. The scheme aims to support well-performing MSMEs to expand, modernize, and become more competitive.

A special feature of this scheme is that no collateral security is required. The loan will be covered under the government’s Credit Guarantee Fund, said a press release.

Under the scheme, an MSME can get a loan of up to ₹5 crore, which can cover as much as 80 per cent of the machinery cost. The repayment period can be up to seven years, with a moratorium of up to one year at the beginning. The interest rate is competitive, starting from 5 per cent for units eligible under the CMEDP Scheme. To qualify, the promoter should have a CIBIL score of 700 or more, and the MSME’s CIBIL rating should be between 1 and 5.

Reputed suppliers

The machinery must be purchased only from reputed suppliers, and payment will be made directly to the supplier by KFC.

KN Balagopal, the Finance Minister, said the scheme was designed to make it easier for entrepreneurs to modernize their units and grow their business without worrying about collateral. By supporting investment in new machinery, the government hoped to strengthen Kerala’s MSME sector and boost industrial growth in the State, he said.

Umesh NSK, Managing Director of KFC said the machinery loan scheme for MSMEs would enable small and medium enterprises to upgrade technology and enhance productivity through easier access to machinery finance. With this initiative, the corporation aimed to foster innovation, competitiveness, and job creation in Kerala’s manufacturing sector.

Published on September 10, 2025