KFC - Term Loan For Industrial Activities

The KFC – Term Loan for Industrial Activities is a long-term financing scheme implemented by Kerala Financial Corporation (KFC) to support industrial and manufacturing MSMEs in Kerala. The scheme is currently operational and forms part of KFC’s core industrial development mandate. It is designed to help your business set up new industrial units, expand existing units, modernise facilities, or diversify production activities. By providing structured term loan support, the scheme enables MSMEs to invest in fixed assets, improve productivity, and create sustainable employment within the state.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application process for the scheme

Key Features

Industrial Term Loan Support: The scheme focuses on long-term funding required for capital investment in industrial activities, helping MSMEs build or strengthen production capacity.
Coverage of Project Types: You can apply for setting up a new industrial unit, expanding capacity, modernising machinery, or diversifying into new product lines.
Kerala-Specific Industrial Development: Only units located in Kerala are eligible, aligning with the state’s industrial growth and employment generation objectives.
Viability-Based Loan Amount: Financial assistance is sanctioned based on project cost, technical feasibility, and repayment capacity rather than a fixed cap.
Standard KFC Norms: Interest rate, repayment period, margin money, and security are finalised during appraisal as per KFC’s credit policy.

Financial Assistance

Component	Assistance Provided	Detailed Explanation (with example)
Upper Loan Limit	Up to ₹50 crore	This is the maximum term loan that can be sanctioned. Example: An MSME setting up a large manufacturing unit can seek funding up to ₹50 crore, subject to appraisal.
Promoter’s Contribution – New Units	Minimum 33.33%	For new industrial units, promoters must bring at least one-third of the project cost from their own funds.
Promoter’s Contribution – Energy Saving Projects	Minimum 20%	Energy efficiency or energy-saving projects require lower promoter contribution, encouraging sustainable investments.
Promoter’s Contribution – Acquisition of Existing Units	Minimum 25%	When acquiring an existing industrial unit, promoters must contribute at least one-fourth of the project cost.
Moratorium Period	Up to 2 years	Repayment of principal can be deferred for up to two years, helping MSMEs stabilise operations post-implementation.
Repayment Period	Up to 10 years (including moratorium)	Loan is repayable in monthly instalments within a maximum period of ten years, inclusive of moratorium.
Internal Credit Rating	Minimum 40%	The unit must secure at least 40% in KFC’s internal credit rating assessment to qualify for sanction.

Eligibility Criteria

Who can apply:

MSMEs engaged in industrial or manufacturing activities
New and existing industrial units
Units undertaking expansion, modernisation, or diversification
Enterprises operating within Kerala
Projects found technically feasible and financially viable

Who cannot apply:

Pure trading activities
Commercial real estate projects
Bar hotels and transport businesses
Activities restricted under KFC lending policies

Documents Required

Aadhaar & PAN of promoters
Business constitution documents (Proprietorship / Partnership / LLP / Company)
Udyam Registration (MSME, if applicable)
Detailed Project Report (DPR) showing long-term financial needs
Cost of project and means of finance statement
Proof of promoter’s contribution (33.33% / 25% / 20% as applicable)
Land ownership / lease documents
Building plan approvals (if applicable)
Machinery quotations
Bank statements (last 6–12 months)
Existing loan details (if any)
Statutory approvals relevant to the industry

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: Projects with higher loan size, documentation complexity, or tight timelines.

Option 2: Apply Online via KFC Portal

Visit the KFC Apply Online / Track Application portal
Register and log in as an applicant
Select “Term Loan for Industrial Activities”
Enter project details, loan requirement, and promoter contribution
Upload required documents
Submit the application and track status online

Option 3: Apply through KFC Office

Approach the nearest KFC office
Request application under Term Loan – General (Industrial Activities)
Submit project report and supporting documents
Application is appraised based on credit rating, promoter contribution, and viability
Loan is sanctioned and disbursed as per KFC norms

Power combo with the scheme

Related Schemes

KSIDC - Term Loan

Provides medium- to long-term loans to businesses for capital expenditure, expansion, and project financing.

View details

KSIDC - Bill Discounting Loan

Provides short-term working capital support to businesses by discounting approved bills and receivables for immediate liquidity.

View details

Frequently asked questions

What is KFC Term Loan for Industrial Activities?

It is a general term loan scheme of Kerala Financial Corporation meant to meet the long-term financial needs of industrial and industry-related projects, covering both manufacturing and service sectors, with a strong focus on MSMEs.

What types of industries are eligible under this scheme?

The scheme covers a wide spectrum of industrial activities in both the manufacturing and service sectors, especially Micro, Small and Medium Enterprises (MSMEs), subject to KFC’s appraisal norms.

What is the maximum loan amount under this scheme?

The upper loan limit is up to ₹50 crore, depending on project cost, promoter contribution, internal credit rating, and repayment capacity.

Is there a minimum credit rating requirement?

Yes. The project must obtain a minimum internal credit rating of 40% as per Kerala Financial Corporation’s credit assessment framework.

How much promoter contribution is required?

Minimum promoter contribution depends on project type: - New units (General): 33.33% - Energy-saving projects: 20% - Acquisition of existing units: 25%