About this business scheme
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 Rs. 20.00 lakhs to a max. of Rs. 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.
Benefits at a glance
| Scheme name | Interest Subsidy Scheme for Scheduled Caste/Scheduled Tribe Entrepreneurs (ISSSCSTE) |
|---|---|
| Launched by | Finance Department |
| Benefit type | Cash (money paid to your bank account) |
| Category | Business |
| Level / State | State · Karnataka |
| Official portal | ksfc.karnataka.gov.in (link at the end of this page) |
Key facts
| Implementing agency | Karnataka State Financial Corporation |
|---|---|
| Scheme for | Infra |
| Application mode | Offline |
| Last date | Ongoing (no last date notified) |
| DBT (direct bank transfer) | No |
Who can apply (quick check)
- 👤All genders
- 🏷️SC / ST
- 📝Offline
Quick check from official data. Full conditions are in the Eligibility section.
What you receive
Loan Amount:
- Minimum loan amount under the scheme is Rs. 20.00 lakhs.
- Maximum loan amount under the scheme is Rs. 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 Rs. 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 Rs. 500.00 lakhs and upto 10 years in case of loan above Rs. 500.00 lakhs but below Rs. 1,000.00 lakhs.
Who qualifies
- 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 Rs. 1,000.00 lakhs of the loan. Interest amount on the balance loan amount beyond Rs. 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.
Who is not eligible
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Papers to keep ready
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Registration walkthrough
Offline
Step 1: The interested applicant should visit (during office hours) the Branch Office (SC-ST-E.pdf) and request a hard copy of the prescribed format of the application form from the staff exclusively entrusted to issue and collect filled-in applications.
Step 2: In the application form, fill in all the mandatory fields, and attach copies of all the mandatory documents (self-attest, if required).
Step 3: Submit the duly filled and signed application form along with the documents to the Branch Office.
Step 4: Request a receipt or acknowledgment from the concerned authority to whom the application has been submitted. Ensure that the receipt contains essential details such as the date and time of submission, and a unique identification number (if applicable).
Frequently asked questions
What is the Interest Subsidy Scheme for SC/ST Entrepreneurs?
It is a scheme introduced by the Government of Karnataka to provide interest subsidies on loans for SC/ST entrepreneurs through KSFC.
What is the effective interest rate under the scheme?
The effective interest rate is 4%, with the difference covered by the GoK.
Who is eligible to apply for this scheme?
SC/ST entrepreneurs who fully own their enterprises are eligible.
Can I apply for a loan to expand my existing business?
Yes, the scheme supports expansion, diversification, and modernization of existing units.
What is the minimum loan amount I can apply for?
The minimum loan amount is Rs. 20 lakhs.
What is the maximum loan amount I can apply for?
The maximum loan amount is Rs. 1,000 lakhs, including a working capital term loan of up to Rs. 50 lakhs.
Can I avail of more than one loan under this scheme?
Yes, but the total loan amount across projects must not exceed Rs. 1,000 lakhs.
What is the repayment period?
The repayment period is 8 years for loans up to Rs. 500 lakhs and 10 years for loans above Rs. 500 lakhs.
Are units that have availed of other GoK/GoI subsidies eligible?
No, units that have availed of interest subsidies under other schemes are not eligible.
What happens if I default on loan repayment?
The unit will not be eligible for the interest subsidy if it defaults on KSFC loan repayments.
Can I get a loan for a new business under this scheme?
Yes, loans can be availed for establishing new units.
Is there a restriction on the type of business I can start?
The scheme supports Micro, Small Scale, and Service Enterprises only.
Submit your application yourself on the official portal; it costs nothing. Treat anyone demanding money to "get you approved" as a scam.
- Guidelines ksfc.karnataka.gov.in (PDF)
- Website ksfc.karnataka.gov.in
tsmpb.in is not affiliated with any government department. Apply only on the official portal and never pay anyone for an application.
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