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The Kerala Financial Corporation (KFC) will increase the collateral-free loan limit for start-ups from the present ₹10 crore to ₹ 15 crore, Finance Minister K.N. Balagopal. Inaugurating the KFC Startup Conclave 2024 here, Mr. Balagopal said the collateral-free loans for scaling up start-ups will have a new limit of ₹3 crore compared to the previous ₹2 crore. The KFC Startup Conclave 2024 was held to foster innovation and collaboration within Kerala’s start-up ecosystem, KFC officials said. Through the ‘KFC Startup Kerala’ scheme, KFC has been supporting start-ups. To date, it has provided 61 technology-based start-ups with ₹78.52 crore in loans. This year, the institution plans to assist an additional 100 start-ups.

Kerala Financial Corporation organises start-up conclave

The Kerala Financial Corporation (KFC) has announced a low-interest loan scheme aimed at supporting ex-servicemen in starting their own businesses. Under this initiative, loans of up to Rs 2cr will be provided for micro, small, and medium enterprises (MSMEs), with a significant interest concession of 5%. This means that entrepreneurs will only need to pay an effective interest rate of 6%.. Under the scheme up to 90% of the project cost can be financed through the loan. Although an interest rate of 11% has been established , the govt will provide a 3% subsidy, and KFC will offer an additional 2%interest rebate. As a result , the entrepreneur will only need to cover 6% of the interest. Loans will be available to those enterprises that secure MSME Udyam registration.

KFC loans scheme for ex- servicemen

Kerala Financial Corporation (KFC), a leading state financial corporation, has reported a record-high net profit of ₹98.16 crore in FY24-25, reflecting a 32.56 per cent increase from the previous year. Loan portfolio crossed ₹8,000-crore milestone at ₹8,011.99 crore, while net worth increased to ₹1,328.83 crore. State Government has infused a capital of ₹920 crore, enabling KFC to offer loans to MSMEs at interest rates starting from as low as 5 per cent. Infusion of ₹200 crore in share capital has boosted Capital Adequacy Ratio (CRAR) to 28.26 per cent, well above the RBI-mandated minimum of 15 per cent for NBFCs. Asset quality too has looked up with gross NPA reducing to 2.67 per cent (from 2.88 per cent of previous year) and net NPAs to 0.61 per cent (0.68 per cent). Sanctions to MSMEs, startups and others have totalled ₹4,002.57 crore loans. Total loan disbursements come to ₹3,918.40 crore, while recoveries add up to ₹3,980.76 crore.

Kerala Financial Corporation returns record-high net of ₹98.16 crore

FY25 asset quality improved with GNPA at 2.67%, NNPA at 0.61%, and an 86.41% PCR. Despite an interim Sept 2025 spike to 4.18% GNPA—attributed to the timing of technical write-offs—management expects FY26 levels to stay below FY25. Controlling asset quality during growth remains a key monitorable.


FY25 net profit reached ₹98.16 Cr (up from ₹74.04 Cr) driven by increased income and zero provisioning, raising ROE to 7.39%. H1FY26 performance strengthened further, with net profit surging 46.82% to ₹95.14 Cr as interest income growth outpaced rising borrowing costs.



The issuer has made timely interest payments.

Sriram Venkitaraman (IAS), MD

Kerala Financial Corporation (KFC), established in 1951, is a state-owned institution (99.33% govt-held) dedicated to promoting industrialization in Kerala. It serves as a nodal agency for state policy initiatives and provides vital financial assistance to MSMEs in the manufacturing and service sectors.


BWR derives comfort from the structured payment mechanism, including a 20% cash collateral (FD/investment bonds) and a DSRA for the outstanding ₹312.50 Cr NCDs.


KFC maintains robust capitalization with a 30.78% CRAR (Sept 2025), doubling the 15% regulatory requirement. Driven by a ₹200 Cr infusion, net worth grew from ₹1,328.48 Cr (FY25) to ₹1,424.04 Cr.


Security Name: 8.90% Kerala Financial Corporation 31 Mar 2031

ISIN: INE818F07179

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