KSFC's 4% Interest Subvention Loan Scheme for Women Entrepreneurs

Disclaimer….before you read ahead!

The information contained herein is of a general nature and for information purposes only, with the intent of raising awareness around various resources, schemes etc. available for women entrepreneurs in India. It is not intended to address the circumstances of any individual or entity. It does not purport to be all-inclusive or necessarily contain all the information that may be relevant for the reader, and may be subject to updation, revision or amendment. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to remain accurate in the future. The reader, therefore, is required to exercise their discretion; and not act on such information without appropriate professional advice after a thorough examination of the particular situation.

Furthermore, we are not a lender and are not authorized by the Reserve Bank of India to act as one. By disseminating the information contained herein, we are not soliciting any borrower or customers for the company or organization mentioned herein nor do we intend to syndicate any capital for the reader of this article.

About this scheme…

4% Interest Subvention Loan Scheme for Women Entrepreneurs is an interest subsidy offering launched in 2015-16 by Karnataka State Financial Corporation (KSFC) exclusively for women entrepreneurs in Karnataka who avail term loan from KSFC to encourage them.

How is it being implemented?

Under this Scheme, direct financial incentive in the form of interest subsidy is given exclusively to,

Women Entrepreneurs setting up or expanding or modernizing or diversifying new or established Micro & Small Enterprises in Services Sector in Karnataka who avail term loan from KSFC
- Micro & Small Enterprises in Services Sector means Hotel, Resort, Restaurant, Catering Services, Event Management, Amusement Park, Tourist Service Agency, Hospital, Nursing Home, Electro Medical Equipment for Doctor, Eye Hospital, Dental Hospital, Medical Clinic, Diagnostic Centre including X-Ray Scanning & Laboratory Services, Spa, Gym or Health Club, and IT Enabled Services
- If you don’t find your sector here, please enquire with KSFC via means mentioned below

In this article, for convenience, we are elaborating on the features of both – 4% Interest Subvention Loan Scheme for Women Entrepreneurs & the underlying Term Loan.

What is on offer?

I. Product

Term Loan
Ticket Size: ₹5 Lakhs to ₹5 Crores

II. Purpose:

Construction of building
Acquiring equipment

III. Borrower Type:

Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Private Limited Company

IV. Security or Collateral or Guarantee or Insurance

Security: Charge on assets created out of KSFC’s finance under this Scheme
Collateral: Nil. For confirmation, please contact KSFC via means mentioned below
Guarantee: Nil
Insurance: For more information around this, please contact KSFC via means mentioned below

V. Interest Rate

Effective Rate of Interest: 4% per annum
- KSFC shall sanction term loans with Normal Rate of Interest which may range from 12.00% to14.50% Less Rebate of up to 3%. For more information on Rebates, read details under Interest Rates >> Rebates & Concessions here
- Borrower will pay such Normal Rate of Interest
- The difference between Normal Rate of Interest charged by KSFC and Effective Rate of Interest will be reimbursed on a monthly basis by Karnataka State Women’s Development Corporation (KSWDC), provided the borrower is regular in repayment of installments

VI. Processing Fee

May range between 0.50% to1.00%

VII. Margin Money Requirement

For business in Backward District or Regions of Karnataka: 20.00%
For business in Non-Backward District or Regions of Karnataka: 22.50%
For more information, refer to Schemes >> Term Loans here

VIII. Tenure, Repayments & Pre-Closures

Tenure
- For Term Loan: For more information around this, please contact KSFC via means mentioned below
- For Interest Rate Subsidy or Subvention: 5 years from the date of first disbursement of loan, even though the repayment period extends beyond 5 years

Repayments: For more information around this, please contact KSFC via means mentioned below
Pre-payment & Foreclosure Charges: For more information around this, please contact KSFC via means mentioned below

IX. Turnaround Time

For more information around this, please contact KSFC via means mentioned below

Interested? Read ahead to check your eligibility….

Are you setting up or expanding or modernizing or diversifying new or established Micro & Small Enterprises in Services Sector in Karnataka?

II.

Is your business profitable?

III.

Do you own your business individually or along with other women?

In case of Partnership or Private Limited Company, do women as Partners or Shareholders, as applicable, own more than 51% share?

IV.

Are you looking to avail loan from KSFC?

Is the end use of such Term Loan for construction of building and/or acquiring equipment?

VI.

Can you confirm that you are not looking use the loan proceeds in infrastructure projects like Kalyana Mantapas, Housing & Commercial Buildings, Construction & Real Estate (CRE) Sector, Purchase of Construction Equipment, Malls, Cinema Houses, Business or Trading Activities, Transport Vehicles etc.?

VII.

Can you confirm that you have not availed interest subsidy or subvention facility under any other scheme(s) of Government of Karnataka or Government of India?

VIII.

Can you confirm that you are not looking use the loan proceeds to purchase of industrial plots from Karnataka Industrial Areas Development Board (KIADB) or Karnataka State Small Industries Development Corporation (KSSIDC) or any other government agency?

IX.

Can you confirm that you are not looking use the loan proceeds to take over loan from other Banks or NBFCs or NSIC or private financiers or FIs, or conversion of earlier loan(s) availed from KSFC?

If your answers to the questions above are an emphatic YES, you are all set to avail 4% Interest Subvention Loan Scheme for Women Entrepreneurs!

So…how big is this Scheme and what has been done so far?

I. While exact information around women entrepreneurs who have benefitted under this Scheme does not seem to be available in the public domain,

During 2023-24, loans worth ₹314 Crores were given to 258 women entrepreneurs including loans under this Scheme

As on March 31, 2024, KSFC had a loan outstanding of ₹5,174 Crores given to 31,706 women entrepreneurs including loans outstanding under this Scheme

So, now, how should you go about it?

I. For submitting application, please contact Branch Managers or visit one of the 30 branch offices of KSFC details of which you can find here, here or here

II. For information on Documentation Required, Application Form etc., please refer here

III. For any queries, please contact KSFC via

Toll Number: +91 80 22263322

E-mail: bdcr.ksfc@karnataka.gov.in OR bdcrksfc@gmail.com

Contact Branch Managers or visit one of the 30 branch offices of KSFC details of which you can find here, here or here

Go on then…and do spread the word!

Sources:

About 4% Interest Subvention Loan Scheme for Women Entrepreneurs: Click on Women Entrepreneurs Scheme here
KSFC’s Operational Statistics & Annual Report 2023-24: Refer here