ISSSCSTE

The scheme aims to encourage SC/ST entrepreneurs to establish micro or small-scale service enterprises & to expand, diversify, or modernize their existing units. Under this scheme, a loan amount ranging from a min. of ₹20.00 lakhs to a max. of ₹1,000.00 lakhs is provided at an interest rate of 4%.

The Government of Karnataka has introduced the interest subsidy scheme on loans sanctioned to Scheduled Caste (SC)/Scheduled Tribe (ST) entrepreneurs by Karnataka State Financial Corporation (KSFC). The scheme aims to encourage SC/ST entrepreneurs to establish micro/small scale/services enterprises to expand/diversify/modernization of their existing units.

• The unit shall be fully owned by SC / ST entrepreneurs i.e., all promoters in proprietary / partnership / company shall belong to SC/ST community only.
• The ownership / share holdings of units even in part by other than SC/STs are not eligible for interest subsidy.
• Entrepreneurs either can be SCs / STs or both.

Others terms & conditions:

• The units which have availed the interest subsidy under any other scheme of Government of Karnataka/Government of India are not eligible for interest subsidy under this scheme.
• To be eligible for interest concession under the scheme, the units should not be in default in repayment to KSFC.
• KSFC is at liberty to consider any amount of project cost. However, the interest subsidy is restricted to ₹1,000.00 lakhs of the loan. Interest amount on the balance loan amount beyond ₹1,000.00 lakhs is required to be borne by the entrepreneurs.
• KSFC may sanction loans with normal applicable rate of interest, the effective interest rate to be paid by the beneficiary / borrower will be 4%. The difference between the normal lending rate of KSFC and effective interest rate of 4% will be reimbursed by Government of Karnataka.

Loan Amount:

• Minimum loan amount under the scheme is ₹20.00 lakhs.
• Maximum loan amount under the scheme is ₹1,000.00 lakhs which includes term loan and one time working capital term loan based on the project proposal but working capital term loan is restricted to maximum of ₹50.00 lakhs. However, repetition of working capital term loan sanction is not allowed.
• The loan can be availed for establishing new units or expanding / diversifying / modernizing their existing units for more than one occasion, but the aggregate loan extended shall not be more than maximum limit under the scheme.

Rate of Interest:

• The effective rate of interest is 4% only.

Repayment Period:

• The repayment period is 8 years including moratorium period in case of loan upto ₹500.00 lakhs and upto 10 years in case of loan above ₹500.00 lakhs but below ₹1,000.00 lakhs.