Interest subsidy for SME loans raised

Micro and small scale industries (SSIs) of Karnataka will now get an interest subsidy of 6 per cent for their loan availed from the Karnataka State Financial Corporation (KSFC).

The state had issued an order in this connection on last March 10. Chief Minister Siddaramaiah, who also holds finance portfolio, had announced in the 2014-15 budget an interest subsidy of 6 per cent for KSFC loans for micro and SSIs.

While thanking the chief minister for fulfilling the budget commitment, Mysore Industries Association (MIA) President P Vishwanath and General Secretary Suresh Kumar Jain said during the meetings on pre-budget proposals and on other occasions, MIA was pursuing the possibility of providing a loan to the SSIs at a rate of 6 per cent as given to SC/ST entrepreneurs at 4 per cent.

With the 6 per cent interest subsidy offer, entrepreneurs can get loans from KSFC at 8 per cent now.

This will encourage first generation entrepreneurs to venture into industrial projects, they said.

SSI investment limit is Rs 5 crore as per MSMED Act. But Karnataka limited this interest subsidy facility for projects up to Rs 1 crore and in place of interest rate of 6 per cent it has announced interest subsidy of 6 per cent, consequent of which SSIs now have to pay 8 per cent interest.

However, regretably this had been limited to first-generation entrepreneurs only, the MIA said.

It has asked SSI Minister Sathish Jarkhiholi to direct the government to enhance the limit of investment to Rs 5 crore and fix 6 per cent interest rate as committed in the budget for all micro and SSIs.

First generation entrepreneurs can avail a maximum loan of Rs 70 lakh at 8 per cent, availing of 6 per cent interest subsidy through the KSFC along with applicable state government investment subsidy. For more information, entrepreneurs can contact the KSFC or the MIA, they added.