Southern States - Kerala   

KFC revamp on the cards

By Our Special Correspondent

THIRUVANANTHAPURAM FEB. 12. The Government proposes to revamp the Kerala Financial Corporation (KFC) so as to make it a more entrepreneur-friendly organisation.

The Finance Minister, K. Sankaranarayanan, called a meeting of top officials of his department and the KFC to make a review of its performance.

The objective of this State public sector company is to promote entrepreneurship by acting as an entrepreneur-friendly financing agencies. But the Government's own assessment now is that its performance has been quite disappointing.

The Minister told the meeting that the popular image of the KFC was that it was creating all kinds of difficulties to those who had taken assistance from it. This image had to change.

He suggested that the KFC should initiate a scheme for extending the facility of one-time settlement of outstanding dues to the entrepreneurs who had fallen into arrears. They should also be given maximum possible concessions as an incentive to settle their dues.

Similarly, the interest rates everywhere were going down nowadays. The KFC could not retain its interest rates at a level higher than the one prevailing in the market under whatever circumstances. Its funds came from the Small Industries Development Corporation as refinance assistance and from public bonds. Therefore, the interest rates fixed by it were related to the interest rates it had to pay for the funds mobilised by it. However, when the rates were coming down elsewhere, the KFC could do business only if reduced its interest rates also, the Minister said.

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