KSFC Interest Subsidy Scheme for SC/ST Entrepreneurs — Loans up to ₹10 Cr — Frequently Asked Questions

Loans start at ₹20 lakh and go up to ₹1,000 lakh, which is ₹10 crore. A single sanction can combine a term loan with a one-time term loan for working capital, but the working capital portion cannot go beyond ₹50 lakh.

You pay an effective rate of 4%. KSFC's standard lending rate is higher, and the difference is reimbursed by the Government of Karnataka directly to KSFC. That means the benefit reaches you through your loan account rather than as a separate payment.

No. It works as an interest subsidy attached to a KSFC business loan. You borrow from KSFC and repay the loan, while the government's support comes in the form of a reduced interest burden. Equity or a stake in your company is not part of the scheme.

Ownership is the deciding factor. The unit has to be entirely owned by Scheduled Caste and/or Scheduled Tribe entrepreneurs — whether it is a proprietary concern, a partnership or a company, every promoter must belong to the SC/ST community. A unit with any non-SC/ST owner will not qualify.

The published terms of the scheme do not list DPIIT recognition or Udyam/MSME registration as a separate condition. What they do require is that the enterprise be a micro, small-scale or service-sector unit that is fully SC/ST-owned, that it has not availed an interest subsidy under any other Government of Karnataka or Government of India scheme, and that it is not in default on repayments to KSFC.

Both are covered. The scheme supports setting up a new unit as well as expanding, diversifying or modernising an existing one.

Loans of up to ₹5 crore can be repaid over up to 8 years. For loans above ₹5 crore and up to ₹10 crore, the repayment period extends to 10 years. Any moratorium period is counted within these timelines.

You collect the prescribed form from a KSFC branch office and attach self-attested copies of your supporting papers. These typically include caste certificates for every promoter, proof of identity and address, business registration documents, a project report setting out the plan in detail, and financial statements if the unit is already operating. Always take a submission receipt that records the date, time and any reference number.

Applications are made offline at a Karnataka State Financial Corporation branch office during working hours. Ask the staff for the prescribed application form, fill in every mandatory field accurately, sign it and submit it along with your documents. There is no fixed last date — the scheme runs on a rolling basis, so you can apply whenever your proposal is ready.

KSFC officials screen and evaluate each proposal. They look at the viability of the project, whether the entrepreneurs meet the eligibility conditions and whether the application adheres to all scheme terms. No pitch rounds or multiple selection stages are mentioned. Final sanction of the loan and approval of the interest subsidy both depend on KSFC's credit appraisal and the Government of Karnataka's reimbursement guidelines.

KSFC Interest Subsidy Scheme for SC/ST Entrepreneurs — Loans up to ₹10 Cr is offered by Karnataka State Financial Corporation, a government body. It is provided as non-dilutive funding.

Apply directly through the official application link on this page. Review the eligibility criteria and prepare your startup documents before you begin.