KFC - Modernisation, Upgradation, Expansion and Diversification

The KFC – Modernisation, Upgradation, Expansion and Diversification (MUED) scheme is a term loan facility implemented by Kerala Financial Corporation (KFC) to support existing MSMEs in Kerala that plan to improve, grow, or reposition their businesses. The scheme is currently operational and aims to strengthen the competitiveness and sustainability of MSMEs by funding eligible capital expenditure activities. Through this scheme, your enterprise can access structured long-term finance to modernise operations, upgrade technology, expand capacity, or diversify into new products or services.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Type of Loan: This is a term loan meant for medium- to long-term investment needs. It supports capital expenditure rather than short-term operational expenses.
Purpose: The loan is provided for modernisation of existing machinery, technological upgradation, expansion of production capacity, or diversification into new lines of products or services.
Eligible Activities: Activities such as replacement of obsolete machinery, installation of advanced technology, setting up additional production lines, or introducing new products within the same or related business domain are eligible.
Loan Amount: The loan amount is determined based on project cost, promoter’s contribution, financial viability, and repayment capacity, as assessed by KFC.
Repayment Period: The loan is repayable in monthly instalments over a period fixed by KFC, including a moratorium period wherever applicable.
Moratorium Period: A moratorium on principal repayment may be allowed depending on the nature of the project and implementation timeline.

Financial Assistance

Component	Assistance Provided	Detailed Explanation (with example)
Loan Amount	As assessed by KFC	The loan amount depends on project cost and viability. Example: An MSME upgrading machinery may seek funding to replace outdated equipment.
Promoter’s Contribution	As per KFC norms	Promoters must contribute a portion of the project cost from their own funds, ensuring financial commitment to the project.
Repayment Period	Medium to long term	Repayment tenure is structured based on cash flow generation after modernisation or expansion.
Moratorium	As applicable	A moratorium may be allowed during installation or commissioning phase to ease repayment burden.

Eligibility Criteria

Who can apply:

Existing MSMEs operating in Kerala
Manufacturing and service sector units
Units with proven operational track record
Enterprises with satisfactory repayment history
Units complying with statutory and regulatory requirements

Who cannot apply:

New or non-operational units
Units with poor credit or repayment history
Activities not aligned with MSME development objectives
Projects without required approvals

Documents Required

Udyam (MSME) Registration Certificate
PAN of firm/company and promoters
Detailed Project Report (DPR)
Quotations for machinery or technology upgradation
Financial statements and bank statements
KYC documents of promoters
Statutory approvals, if applicable

Application Process for the Scheme

Option 1: Apply with Bullit (Recommended)

Start instantly with our guided application support, where our team verifies eligibility, prepares documentation, and coordinates with the Industries Department on your behalf. Using our business loans and compliance calendar, you can track progress while focusing on project execution, we manage the application end-to-end.
Recommended for: MSMEs planning capital-intensive modernisation or expansion projects.

Option 2: Apply Online via KFC Portal

Visit the KFC Apply Online / Track Application portal
Register and log in as an applicant
Select Modernisation / Expansion / Diversification Loan
Enter project and financial details
Upload required documents
Submit application and track status online

Option 3: Apply through KFC Office

Visit the nearest KFC office
Apply under Term Loan – MUED
Submit DPR and supporting documents
Application is appraised based on viability and credit rating
Loan is sanctioned and disbursed as per KFC norms

Related Schemes

KFC - Working Capital Loans

Provides working capital financing to businesses to manage day-to-day operational expenses and maintain smooth cash flow.

View details

KFC - Short Term Loan

Provides short-term financial support to businesses to meet immediate working capital and operational requirements.

View details

Frequently asked questions

What is the purpose of the KFC Modernisation and Expansion Scheme?

The scheme supports existing MSMEs in upgrading technology, replacing outdated machinery, expanding production capacity, or diversifying into new products. It helps businesses improve efficiency, competitiveness, and revenue potential through structured term loans.

Is the KFC Modernisation loan available only for manufacturing units?

No. While manufacturing units commonly apply, eligible service and industrial units operating in Kerala can also apply, provided the project involves genuine modernization, expansion, or diversification and meets lending norms of Kerala Financial Corporation.

Can MSMEs use this scheme to buy new machinery?

Yes. One of the primary objectives of the scheme is to finance the purchase of new plant and machinery, technology upgrades, automation systems, or infrastructure improvements required for business expansion or modernization.

Does the scheme provide working capital support?

The scheme primarily offers term loan assistance for capital expenditure. However, working capital requirements may be considered separately based on project structure and KFC’s credit assessment.

What documents are required to apply for the KFC modernization loan?

Applicants typically need a detailed project report, financial statements, KYC documents, business registration certificates, GST details, and proof of promoter contribution. Additional documents may be requested based on project size and risk assessment.