Finance Minister K.M. Mani said here on Sunday that the State government would soon launch an education loan scheme under the auspices of the Kerala State Financial Enterprises (KSFE) for the economically weaker sections of society.
In a statement, Mr. Mani said under the scheme, families with annual income of less than Rs.1 lakh would be eligible for loans up to Rs. 10 lakh at an interest rate of 12 per cent. Of this, the State government would provide interest subsidy of 4 per cent, making the loan amounts available at an effective interest rate of 8 per cent, he said. The scheme, ‘Vidhya Dhanam', is a follow-up of his promise in his budget speech and would be launched in the second week of September, he said.
The education loan would be available for other sections of society at an interest rate of 13.5 per cent. Those who make prompt repayment would be eligible for interest waiver of one per cent. Students joining medicine, engineering, management, para-medical, veterinary, agriculture, dental and such professional courses are eligible to take the loans. The repayment period is five years, with a maximum limit of 11 years. The repayment period will begin from the 12{+t}{+h} month of completing the course. Parents would be co-obligators for such loans.
Loans up to Rs. 5 lakh would be available on the basis of personal guarantee. For loans above Rs.5 lakh, LIC policy, gold and KSFE chitty pass books would be accepted as surety. The loans would be available in all the branches of KSFE.
Mr. Mani said the KSFE has earmarked Rs. 30 crore for disbursement under the scheme and around 2,000 students would be benefitted by it. The loan amount can be utilised for admission fee, caution deposit and other fee. He claimed that a subsidised education loan scheme for weaker sections was being implemented in Kerala for the first time. Currently, loans available from banking institutions carried an interest of 10 per cent for those with annual income of less than Rs. 4 lakh, he added.
