Industrialists from north Karnataka have demanded for special credit and financial assistance package by the Karnataka State Finance Corporation (KSFC) to support industries during economic crisis. At a business meet organised by the KSFC here on Wednesday, industrialists said keeping in mind the bad shape of the Indian economy, it was important for government financial institutions like KSFC to extend a helping hand to industries, especially the manufacturing sector. The special package should be designed well and must help tackle crisis, along with boosting the industrial development in north Karnataka, they said.
The KSFC was lending loan at 14 per cent interest rate. Also, 0.5 per cent rebate was given to businessmen during repayment. Though this interest rate was a bit cheaper compared to nationalised banks and private financial institutions, the KSFC should come up with a goodwill gesture at a time when the value of rupee was depreciating. It was a matter of concern that new entrepreneurs were stepping away from starting businesses, following collateral security, heavy documentation and high rate of interest.
They wanted the KSFC to slash the rate of interest by 1.5 per cent and lend small loans. The KSFC was at present lending loans from Rs. 5 lakh to Rs. 10 crore depending on the industries being set up. Industrialists who have availed themselves of loan from the KSFC under the Scheduled Castes/Scheduled Tribes scheme have demanded that the loan cap be hiked from the existing Rs. 2 crore. This apart, the relaxation of 25 per cent shown in collateral security to the Scheduled Castes/Scheduled Tribes should be enhanced to 50 per cent, they said.