With the Covid pandemic raging in Kerala and the figures of the infected reaching the highest in the country, State Finance Minister K.N. Balagopal on Friday announced a Rs 5,650 crore financial package which will come in the form of interest subsidy on loans. Rent for buildings owned by the government would also be waived.
Balagopal told the media that this will be of help to traders, farmers besides MSMEs.
“The state government will bear the interest of 4 percent for six months for all loans up to Rs 2 lakh that will be availed from August, likewise rents for six months will also be waived. Interest subsidy will also be provided to state-run financial organisations besides penal interest will also be waived,” said Balagopal.
He said this is going to benefit around one lakh people and it will cost Rs 2000 crores.
“Today the commercial banks for some reason are not that friendly towards small customers. All they now look for is to extend loans to giants rather than giving the same amount to thousands of small traders. Just look into the credit deposit ratio in Kerala it’s only 60 percent,” said Balagopal.
He said that the Kerala Financial Corporation will extend loans up to Rs one crore without any security for start-ups and Rs 50 crore has been set aside for that.
“The Chief Minister’s programme for new business for those aged under 50 will see 2500 new ones (500 new entrepreneurs every year for the next five years) who will get a loan of up to Rs one crore at 5 percent interest,” said Balagopal.
This is the third package announced by the Vijayan government since the pandemic struck last year.