KFC gets first ever low-cost refinance from IIFCL

: Kerala Financial Corporation (KFC), a state-based industrial financing institution, has been sanctioned low-cost refinance of Rs 200 crore by India Infrastructure Finance Company Ltd (IIFCL).

IIFCL, a Central government undertaking, which provides long-term financial assistance for infrastructure projects, sanctioned the loan to KFC at a rate of 8.47 per cent, which is the lowest rate of borrowing availed by KFC so far, a press release said today.

"Since the refinance from IIFCL is at a lower rate, KFC will be able to bring down its overall cost of funds and lend at competitive rates now. KFC is also exploring the possibility of raising further low cost funds through bond issue an dshare capital," it said.

KFC has been depending on bank borrowings for its lending activities and hence its cost of fund has been traditionally higher.

Since borrowing cost itself was high, the corporation was not able to reduce its lending rates so far and was unable to lend at competitive rates.

This is the first time a Kerala-based public finance institution has got the assistance from IIFCL.

"KFC will use the fund to finance projects coming up in Kerala," the release said.

After assuming charge as KFC's Chairman and Managing Director Sanjeev Kaushik had held discussions with various industrial associations to realign the corporation's credit policies and lending terms to suit the requirements of MSME sectors.

As a special drive to support industrial sector in the state, KFC has already come up with a special interest rate of 9.5 per cent to manufacturing and 10 per cent to service sector.

The interest reduction will benefit thousands of manufacturing, industrial and service sector units of the State.