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1 PÉJ ïj sï¹ ªÁvÉð KSFC NEWS KARNATAKA AGRIBUSINESS & FOOD PROCESSING POLICY 2015 r ÉA gï d ÀªÀj 2016 December January 2016 ÀæwQæAiÀiÁvÀäPÀ À«Ã ÀvÉ ÁgÀzÀ±ÀðPÀ ^mavr` _mzh$ ã`yamo IS / ISO 9001:2008 _mzh$: nwàxe H$: Bureau of Indian Standards QMS

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3 Vol. 37 December January 2016 Issue No. 04 Women entrepreneurs make a significant contribution to the Indian economy and should be encouraged to participate in the MSME growth story. There are nearly three million MSME's with full or partial female ownership. Collectively, these women-owned enterprises contribute 3.09 percent of industrial output and employ over 8 million people. Approximately, 78 percent of women enterprises belong to the services sector. Women entrepreneurship is largely skewed towards smaller sized firms, as almost 98 percent of women-owned businesses are currently micro-enterprises. The government has realized the importance of entrepreneurship as a prominent alternative to traditional wage employment in the new economy, and its role in increasing the pace of economic growth. Therefore, Government of Karnataka has come up with a special scheme to help women entrepreneurs for which Karnataka State Financial Corporation is the nodal agent. The scheme is available at a net interest rate of four percent. The salient features of the scheme are published in the issue for benefit of women entreprenerus of Karnataka. The agro based industries in the State are spread across all the 30 districts. Currently, there are about 54,905 agro processing units with an investment of Rs.4,42,879 Lakhs and have employed 3,24,148 manpower. These are mainly in MSME sector. Agribusiness & Food Processing Sector in the State has witnessed a steady growth. Exports have increased from Rs.5158 crore in to Rs crore in registering a Compounded Annual Growth Rate (CAGR) of 21%. Considering the importance of agro based industries in the State, Karnataka Agri Busiess & Food Processing Policy 2015 has been released by the Government of Karnataka during December The salient features are available in the present issue. Interest Subsidy Scheme is available from GoK to encourage establishment of warehouses and cold storage around villages and towns. The financial assistance is available under the scheme at a net interest rate of four percent from Karnataka State Financial Corporation to the proprietary concern / partnership firms / farmers and interested parties belonging to farmers / farmer associations / self help groups / cooperative societies / agriculture produce / marketing committees / farmer federation / NGOs. Interest subsidy from GoK is limited to 10% in the normal RoI on the loan amount. The promoter shall however repay the net of interest rate i.e., normal rate of interest less 10% interest subsidy from GoK. Stories of successful entrepreneurs have been published in each issue to motivate the budding entrepreneurs and also existing industrialists to achieve higher goals in their respective avenues. With the introduction of new schemes like Interest Subsidy Scheme for the first generation entrepreneurs at the rate of 8% for establishing new Micro and Small Industries backed by interest subsidy from GoK, Scheme for financing Solar Power Generation Projects and Scheme of Venture Capital Assistance for Agribusiness projects offering 26% of promoter equity from Small Farmers' Agri-Business Consortium (Ministry of Agriculture, GoI), the Corporation is expecting to lure more business from entrepreneurs of Karnataka. Sl. No Articles & Reports Brief Industrial Profile of Dharwad District Scheme for Women Entrepreneurs Karnataka Agribusiness & Food Processing Policy 2015 Interest subsidy scheme from Gok to encourage establishment of Warehouses and Cold storages around villages and towns National Vendor Development Programme Ind Expo 2016 Business Interaction Meet of KSFC and United India Insurance Company Conference On Creating Future Entrepreneurs M/s Shree Rajesh Ginning Factory, Dharwad M/s Shanthala Projects, Hubli Karnataka State Financial Corporation Interest Rate Table (term Loans) Effective From Page No

4 KARNATAKA STATE FINANCIAL CORPORATION BRIEF INDUSTRIAL PROFILE OF DHARWAD DISTRICT General Characteristics of the District Dharwad, also known as Dharwar. Dharwad is famous for its Dharwad Peda a milk based sweetmeat. Dharwad is the administrative seat of the district of the same name. KREIS North Unit of National Projects Construction Corporation has its headquarters here. Karnataka High Court circuit Bench is also based here. encompasses an area of 4263 km2 lying between the latitudinal parallels of 15 02' and 15 51' North and longitudes of 73 43' and 75 35' East. The district is bounded on the North by the District of Belgaum, on the East by the district of Gadag, on the South Haveri and on the West by Uttara Kannada district. Forest : Location & Geographical Area Dharwad district is situated in the Western sector of the northern half of Karnataka State. The District The District consists of 35,235 hectares forest cover with any significant produce worth mentioning PRODUCTION OF MINERAL District at a glance Dharwad Sl.No. Particular Year Unit Statistics 1 Geographical Features (A) Geographical Data i)latitude 2011 Max/Min 15º51'00" 15º02'00" ii)longitude 2011 Max/Min 73º43'00" 75º45'00" iii)geographical Area 2011 Hectares 4,26,300 (B) Administrative Units i)sub divisions 2011 Nos. 2 ii)tehsils 2011 Nos. 5 iii)sub-tehsil 2011 Nos. 8 iv)patwar Circle 2011 Nos. 199 v)panchayat Simitis 2011 Nos. -- vi)nagar Nigam 2011 Nos. 5 vii)nagar Palika 2011 Nos. 1 viii)gram Panchayats 2011 Nos. 127 ix)revenue Villages 2011 Nos. 379 x)assembly Area 2011 Nos. 5 2 Population (A) Sex-wise i)male 2011 Nos. 9,39,127 ii)female 2011 Nos. 9,07,866 (B) Rural Population 2011 Nos. 7,97,430 3 Agriculture (A) Land Utilisation i)total Area Hectare 4,27,329 ii)forest Cover Hectare 35,235 iii)non Agriculture Land Hectare 22,057 iv)cultivable Barren Land Hectare 6,442 2

5 Sl. No. Existing Status of Industrial Areas in the District Dharwad Name of Ind. Area Land acquired (In hectare) Land developed (In hectare) Prevailing Rate Per Sqm (In Rs.) No of Plots No of allotted Plots No of Vacant Plots No. of Units in Production 1 Belur Indl. Area Rayapur Indl. area Tarial Indl. area Lakkamanahalli Indl. area Sattur Indl. area Gamanagatti Indl. area Total Industry at a Glance : Industrial Scenerio of Dharwad : Sl.No. Particulars Units 1 Registered industrial unit Total industrial unit 18,877 3 Registered medium & Large unit 12 4 Estimated Avg. No. of daily worker employed in small scale industries 98,124 5 Employment in large and medium industries 7,864 6 No. of industrial area 5 3

6 Sl. No. Details of Existing Micro & Small Enterprises and Artisan Units in the District : Type of Industry No. of Units Investment (Lakh Rs.) Employment 1 Agro based Soda water Cotton textile Woolen, silk & artificial Thread based clothes Jute & jute based Ready-made garments & embroidery Wood/wooden based furniture Paper & Paper products Leather based Chemical/Chemical based Rubber, Plastic & petro based Metal based (Steel Fab.) Engineering units Electrical machinery and transport equipment Repairing & servicing Others Kachori Making Vendorisation / Ancillarisation of the Industry Valves, fabrication and Machinery Components are having more scope in Dharwad district. Medium Scale Enterprises 1. M/s.Gujarat NRE Coke Pvt. Ltd., Belur Industrial Area, Dharwad 2. M/s.Murudeshwar Ceramics, Krishnapur, Hubli 3. M/s.Kirloskar Electric Company, Gokul Road, Hubli 4. M/s.I.A.L. International Auto Ltd., Belur Industrial Area, Dharwad 5. M/s.M.M.Industrial Controls Pvt. Ltd., Belur Industrial Area, Dharwad 6. M/s.Apex auto Pvt.Ltd., Belur Industrial Area, Dharwad. Valves and Machinery Components are the major exportable items. Potential for new MSMEs Infrastructure development focused industries like fabrication, heavy structural Engineering works, electrical and Civil Engineering Enterprises have good demand in the district and also Hotels, Motels, Hospitals, Residential Schools, Agri. Farms, and Agro-based activities like Milking, sheep rearing etc have good scope in the district. Existing Clusters of Micro & Small Enterprise a) Auto Cluster Hubli-Dharwad, Hubli b) Readymade Garments Cluster, Hubli Detail of Major Clusters Manufacturing Sector a) Auto Cluster Hubli-Dharwad, Hubli b) Readymade Garments Cluster, Hubli 4

7 Details for Identified Clusters Names of the Cluster : Auto Cluster Hubli-Dharwad, Hubli : Readymade Garments, Hubli Sl. Particulars No. 1 Principal Products Manufactured in the Cluster Auto Cluster Auto Components 2 Name of the SPV Auto Cluster Hubli- Dharwad, Hubli Readymade Garments Apparel Manufacture Readymade Garments Cluster, Hubli 3 No. of functional units in the clusters 400 Units Turnover of the Clusters Rupees 200 Cr. 25 Cr. 5 Value of Exports from the Clusters Rupees 20 Cr. Nil 6 Employment in Cluster Average investment in Plant & Machinery Rupees 80 lakhs Rs.1.00 lakh 8 Major issues / requirement No Presence of CPSU's, Central Govt. Agencies -- 9 Presence of capable institutions Yes Thrust Areas Export Problems & Constraints Industrial activities not -- encouraged to with the expectation since the location is backward. 12 Testing needs -- Yes required to carry out the testing of fabrics 13 Thrust Area -- Adoption of latest technologies 14 Access to Export Market -- Since, all the units of cluster are women based and micro in nature, exposure of the export market is very less. 5

8 SCHEME FOR WOMEN ENTREPRENEURS The Government of Karnataka has introduced a scheme of interest subsidy in respect of loans availed by women entrepreneurs. Salient features of the scheme are as under: 1. The Scheme is made applicable to the women entrepreneurs who avail term loan from KSFC:- (a) for establishing new units in small & medium scale sector and service enterprises; (b) f o r t a k i n g u p e x p a n s i o n / modernisation / diversification of existing units; (c) for the loans sanctioned after to women entrepreneurs; 2. The unit should be owned by women entrepreneurs. In case of partnership firms and companies, the women partners / directors shall hold minimum 51% shares. 3. The minimum loan size is `5.00 lakhs for all activities, except for existing units going in for expansion / modernisation / diversification. In case of medical and veterinary doctors, the minimum loan size is `2.00 lakhs. The maximum loan size is `50.00 lakhs. 4. The unit will be eligible for interest subsidy for a period of 5-years from the date of first disbursement of the loan, even if the repayment period extends beyond five years. 5. The entrepreneurs are eligible to avail the benefits of interest subsidy under the scheme only once. 6. The interest subsidy under the scheme is eligible only for the term loans sanctioned for small and medium scale industries and not applicable to other type of loans such as WCTL, PE loan, Corporate loan, loans to CRE and transport sector etc., 7. The units which have already availed the interest subsidy under any other scheme of Government of Karnataka / Government of India are not eligible for interest subsidy under this scheme. 8. KSFC shall sanction loans with normal applicable rate of interest and the promoters 6

9 shall pay the interest accordingly. The effective interest rate to be paid by the beneficiary / borrower is 4% p.a. The difference between the normal lending rate of KSFC and effective interest rate of 4% i.e., 10% will be reimbursed by KSWDC on monthly basis. To avail this interest subsidy, the entrepreneurs shall be regular in repayment of installments. 9. The terms and conditions of loan sanction such as promoter's contribution, DER, security requirements, viability of the project etc., shall be ensured by KSFC as per the prevailing Lending Policy. 10. The selection of women entrepreneurs for extending interest subsidy under the scheme shall be done by the District Level Committee headed by the Branch Managers of KSFC, consisting of District Level Lead Bank Managers, Joint Director of DIC, Deputy Director of Women and Child Welfare Department and Officers of KSWDC as other members. 7

10 KARNATAKA AGRIBUSINESS & FOOD PROCESSING POLICY 2015 PREAMBLE: The agro based industries in the State are spread across all the 30 districts. Currently, there are about 54,905 agro processing units with an investment of Rs.4,42,879 Lakhs have employed 3,24,148 manpower. These are mainly in MSME sector. Agribusiness & Food Processing Sector in the State has witnessed a steady growth. Exports have increased from Rs.5158 crore in to Rs crore in registering a Compounded Annual Growth Rate (CAGR) of 21%. The Agriculture and allied sectors viz., Horticulture, Animal Husbandry, Fisheries, Food Processing in the State requires a special focus and thrust in view of their direct impact on the livelihood of the farming community of the State. The value addition to agriculture, horticulture and other sector produce leads to extra income in the hands of farmer and also helps in boosting the economy of the State. Hence, there is a need to have an exclusive Agribusiness & Food Processing Policy to give focused attention for the overall development of agribusiness and food processing sector. In Karnataka, about 3% of the total agro and allied produce is processed currently. The Ministry of Food Processing Industries, Govt. of India aims to achieve the food processing target of 25% by 2025 at the national level. In line with the National benchmark, the Karnataka Agribusiness & Food Processing Policy 2015 aims to achieve the target of 10% of agro processing by 2020 and 25% by 2025 in the State. This policy aims to develop agribusiness and agro processing as a vibrant sector for creating employment opportunities and increasing the farm returns to farmers by value addition. The vision of Karnataka Agribusiness & Food Processing Policy 2015 is to position Karnataka in a sustained growth path in the field of agriculture & allied sectors through global technologies & innovative tools, by creating enabling frameworks and state of art infrastructure facilities, thereby generation of higher returns to farming community. The objectives of the policy are as follows: To increase the value addition and reduce wastage, thereby increasing the income of farmers. To m a x i m i z e d i r e c t a n d i n d i r e c t employment generation opportunities. To create necessary supply chain like transportation, warehouses, and cold storage in the agro processing sector. To increase the flow of investments across the supply chain from farm to market. To e x t e n d t h e s u p p l y c h a i n a n d infrastructure opportunity in rural area. At the all India level Karnataka stands First in the production of coffee, Bengaluru Rose Onion, Sunflower, Gherkins, Arecanut, Capsicum, Green Chilli, Tamarind and Vanilla. Second in the production of Maize, Tur, Jowar, Tomato, Sapota, Grapes, Pomegranates, Pepper, Cut Flowers, Cucumber, Watermelon and Cloves. Third in the production of Sugarcane, Mango, Tobacco, Jackfruit, Onion, Dry Chillies, Cardamom, Cocoa, Coconut and Cinnamon. Fourth in the production of Bengalgram, Papaya, Carrot, Turmeric and Cashewnut. Fifth in the production of Groundnut, Soyabean, Banana, Lime/Lemon and Sweet Orange. The State is also one of the leading producer of Milk, Ginger, Marine Fish, Garlic, Eggs, Guava etc. This policy covers warehousing, silos, cold storage logistics related to Agri-business, Export, Processing, Handling, Storage of Agricultural, Horticultural, Floriculture, Spices, Medicinal and Aromatic Plants, Fish, Meat, Poultry, Dairy, Organic Produce, Research for varietal development, Bio Technology, Bio informatics, Food Testing Laboratories, Tissue culture Laboratories, Seed Processing Units, Irradiation Units, Food Grade Packaging material units and preservatives, Horticulture hub, Food Parks, Sea food parks and Spice park. 8

11 Karnataka Agribusiness & Food Processing Policy 2015 contains the incentives listed below: Sl. No. Particulars Karnataka Agribusiness & Food Processing Policy Investment Promotion Subsidy Investment promotion 35% of the value of fixed assets (VFA) irrespective of zonal and promoter classification up to a maximum of Rs.65 Lakhs for MSME 2 Exemption from Stamp Duty for MSME, Category A, B & C enterprises 3 Concessional Registration Charges for MSME, Category A, B & C enterprises Stamp duty to be paid in respect of (i) loan agreements, credit deeds, mortgage and hypothecation deeds executed for availing loans from State Government including VAT loan from C&I Department and / or State Financial Corporation, National Level Financial Institutions, Commercial Banks, RRBs, Co-operative Banks, KVIB/ KVIC, Karnataka State SC/ ST Development Corporation, Karnataka State Minority Development Corporation and other institutions which may be notified by the Government from time to time for the initial period of five years only and (ii) for lease deeds, lease-cum-sale and absolute sale deeds executed by industrial enterprises in respect of industrial plots, sheds, industrial tenements by KIADB, KSSIDC, KEONICS, Industrial Co-operatives and approved private industrial estates shall be 100% irrespective of promoter & zonal classification for MSME, Category 'A', 'B' & 'C' enterprises For all loan documents, lease deeds and sale deeds, the registration charges shall be at a concessional Rs.0.50 per Rs.1000 irrespective of promoter classification for MSME, Category 'A', 'B' & 'C' enterprises. Note: (i)the exemption of stamp duty and concessional registration charges are also applicable to lands purchased under Section 109 of the KLR Act, 1961 and also for direct purchase of industrially converted lands for the projects approved by SLSWCC / DLSWCC. This incentive will also be applicable for the land transferred by KIADB to land owners as compensation for the acquired land. (ii) The exemption of stamp duty and concessional registration charges are also available for registration of final sale deed in respect of lands, sheds, plots, industrial tenements after the expiry of lease period at the rate as specified in the Industrial Policy which was in vogue at the time of execution of lease-cum-sale deed. 4 Reimbursement of land conversion fee for MSME, Category A, B & C enterprises The payment of land conversion fee for converting the land from agriculture use to industrial use will be 100% irrespective of promoter & zonal classification for MSME, Category 'A', 'B' & 'C' enterprises 9

12 5 Exemption from Entry Tax 6 Subsidy for setting up Effluent Treatment Plant (ETP) MSME: 100% exemption for 3 years on plant and machinery and capital goods and 6 years for raw materials, inputs and component parts and consumables excluding petroleum products from the date of commencement of project implementation and from the date of commencement of commercial production respectively irrespective of zonal classification. Category 'A', 'B' & 'C' Enterprises:100% exemption for an initial period 3 years for Category 'A' and 'B' and 5 years for Category 'C' on plant and machinery and capital goods from the date of commencement of project implementation irrespective of zonal classification. For raw materials, inputs and component parts and consumables excluding petroleum products (wherever applicable) for a period of 5 years from the date of commencement of commercial production. In respect of Category 'B' & 'C' an additional One and Two years will be allowed respectively for operational period. One time capital subsidy to an extent of 75% of the cost subject to a maximum of Rs.50 Lakhs for MSMEs in respect of ETPs costing less than Rs.100 Lakhs. Further, One time capital subsidy to an extent of 50% of the cost of ETPs subject to a ceiling of Rs.100 Lakhs for Category 'A', 'B' & 'C' enterprises irrespective of zonal classification. One time capital subsidy to an extent of 50% of the cost of ETPs subject to a ceiling of Rs.200 Lakhs for setting up of Effluent Treatment Plants (ETPs) as a common facility in food parks, spice parks, sea food parks or a place where the cluster of food processing & agribusiness enterprises are located irrespective of promoter and zonal classification 7 Interest Subsidy Interest subsidy of 6% per annum on term loans will be provided to Micro enterprises irrespective of promoter classification. This interest subsidy is payable to financialinstitutions on behalf of the enterprise only if the enterprise has not defaulted in payment of either principle or interest instalments. The amount of interest subsidy will be effective rate of interest (after deducting interest subsidy receivable by any institution/s under any Government of India scheme) is 6% per annum whichever is less irrespective of promoter classification. The period of interest subsidy is for 7 years irrespective of zonal classification. 8 Exemption from tax on Electricity tariff 9 Reimbursement of VAT to MSME & Category A, B & C Enterprises 100% exemption of tax on electricity tariff for the initial period of eight years irrespective of zonal classification MSME: 75% of net VAT will be reimbursed for a period of 5 years subject to a maximum of 100% of the Value of Fixed Assets irrespective of promoter & zonal classification to be claimed on yearly basis. For Category 'A', 'B' & 'C' enterprises net VAT reimbursement will be to an extent of 60%, 70% & 80% respectively for a period of 5 years subject to a maximum of 100% of the Value of Fixed Assets irrespective of promoter & zonal classification to be claimed on yearly basis. 10

13 10 Subsidy for technology adoption from recognized national Labs 11 Market Fee Exemption 50% of the cost (max Rs.1 Lakh) for MSME irrespective of promoter classification. New Agricultural Produce Processing Industries are exempted from payment of market fee for a period of ten years in respect of purchases of agricultural produce by such industries 11

14 INTEREST SUBSIDY SCHEME FROM GOK TO ENCOURAGE ESTABLISHMENT OF WAREHOUSES AND COLD STORAGES AROUND VILLAGES AND TOWNS Warehouses and Cold storages play a key role in a number of other industries including e-commerce, retail, grocery and other more specific industry segments. A complete effective warehouse management system can increase productivity, allow more efficient space utilisation and reduce overhead costs. Considering the importance of logistic sector for industrial growth, KSFC has introduced a new Interest Subsidy Scheme from Govt. of Karnataka to encourage establishment of warehouses and cold storages around villages and towns. The salient features of the scheme are as below: Terms of Repayment: The interest subsidy will be applicable only for prompt repayment within the due date and shall not be available for delayed repayment or defaulting the due date. The interest subsidy will be available only for first 5 years from the date of first disbursement as a back ended subsidy. Term Loan: Depending on the project cost, maximum project cost will be Rs.3,000/- to Rs.4,000/- per tone capacity for construction. Objective: The objective of the scheme is to provide the farming community with facilities for scientific storage so that the wastage and produce deterioration are avoided and also to enable it to meet its credit requirement without being compelled to sell the produce at a time when the prices are low. Eligibility: The financial assistance is available under the scheme to the following: To the proprietary concern / partnership firms / farmers and interested parties belonging to farmers / farmer associations / self help groups / cooperative societies / agriculture produce / marketing committees / farmer federation / NGOs. Assistance of Interest Subsidy : Interest subsidy from GoK is limited to 10% in the normal RoI on the loan amount. The promoter shall however repay the net of interest rate i.e., normal rate of interest less 10% interest subsidy from GoK. DER: DER shall be as per the norms of the Corporation as follows: In case of loan upto Rs lakhs DER shall be less than 3:1. In case of loans more than Rs lakhs, DER shall be more than 2:1. Others: I) Applicable for claimants of loan sanctioned on or after from Nationalised Banks and State Co-operative Agricultural and Rural Development Banks, Scheduled Commercial Banks, NABARD, Co-operative Banks, Regional Rural Banks, KSFC, National Co-operative Department Corporation, on first come first serve basis. ii) Warehouses and cold storages constructed must be in accordance with the standards of warehousing development and regulatory authority, GoI (WDRA website iii) Constructed units will be eligible for interest subsidy only after accreditation with the WDRA. iv) Sanction of interest subsidy is subject to other guidelines of the Government that may change from time to time. v) In respect of cold storages projects construction of units must be in accordance with the standards of NHM (National Horticulture Mission) vi) KAPPEC has been nominated as Nodal Agency for implementation of the scheme. vii) NABARD is providing back ended subsidy for the project if available from Government of India. For further details on the scheme, please contact your nearest KSFC branch office located in all district headquarters of the State. Promoter s contribution: Promoters contribution shall be minimum 25%. 12

15 NATIONAL VENDOR DEVELOPMENT PROGRAMME IND EXPO 2016 I N D E X P O , a N a t i o n a l Ve n d o r Development Programme(NVDP) Cum th st Exhibition was held on 20 and 21 January The Expo was organised by Ministry of MSME, GoI, MSME Development Institute, Department of Industries and Commerce, GoK, KSSIDC and KASSIA. The IND EXPO was conducted in the premises of MSME Development Institute, Rajajinagar Industrial Estate, Bangalore. of Railways, Defence, Public Sector Undertakings and other large scale enterprises, CPSUs; To enable CPSUs, large enterprises to identify suitable vendors among MSME sector for forging Vendor- Vendee relationship ; To expose the educated youth to the capabilities of different sectors of Indian enterprises by which enticing them to take up entrepreneurship as their career. Karnataka State Financail Corporation had taken part in the NVDP by putting up a stall in the exhibition. Corporation received several enquiries for financial assistance especially under the Interest subsidy new scheme for women entrepreneurs, Scheme for First Generation entrepreneurs and also scheme for SC and ST entrepreneurs. Shri D.V. Prasad, CMD, KSFC addressing the gathering at IND Expo 2016 NVDP and Exhibition was a platform for MSMEs and facilitated market linkages between MSMEs & large industries, Government departments, CPSUs. Enterprises that are mainly into Aerospace, Automotive, Machinery Components, Hydraulic Equipment, Fabrication & General Engineering, Electrical, Electronics and Solar Equipments Manufacturers participated in the exhibition. The objective of the NVDP was to provide an opportunity to MSMEs to showcase their capabilities to various wings of Government which is being the number one purchaser, establishments The stall put up by KSFC was visited by Sri. D.V. Prasad, IAS, the Chairman and Managing Dirctor, KSFC alongwith Dr.B GURAPPA NAIDU, Chairman, KSSIDC, MOHAMMAD MOHSIN I.A.S. Managing Director, KSSIDC, Sri. Ranga Prasad, Director, MSME along with other dignitaries. During the valedictory function at the EXPO, Sri. D.V. Prasad, IAS, the Chairman and Managing Dirctor, KSFC called upon the vendors and entrepreneurs to avail financial assistance from KSFC under the Interest subsidy new scheme for women entrepreneurs, Scheme for First Generation entrepreneurs and also scheme for SC and ST entrepreneurs which carry very attractive rates of interest ranging between four and eight percent only. Sri.D.V.Prasad, IAS and Sri. L.B.Nilogal, Executive Director II, KSFC were felicitated during the event by the organisers. Shri D.V. Prasad, CMD, KSFC visiting the KSFC stall at the Expo along with others dignitaries 13

16 Business Interaction Meet of KSFC and United India Insurance Company. KSFC in association with United India Insurance Company(UIIC) had organized one day interaction meets at Kalaburgi and Hubli on and respectively. The officers from UIIC had attended along with the concerned field officers of KSFC and UIIC. The meeting was chaired by Sri L B Nilogal, Executive Director II, Karnataka State Financial Corporation. The meet was organized mainly to sort out the functional problems that were brought by our Branch Offices. It was also proposed to explore the possibilities of enhancing business prospects of general insurance with the help of nodal officers of KSFC and UIIC. There was an active participation from all the participants of KSFC as well as Officers of UIIC. Dr. Deivasigamani, Regional Manager UIIC, Bangalore, Sri. Abdul Azeez, DGM, UIIC, Bangalore, Sri. L.B. Nilogal. Executive Director-II, KSFC and Sri.B.C. Shivaprakash, DGM, FSD, KSFC Bangalore are seen in the picture. Karnataka State Financial Corporation a premier Financial Institution of the State of Karnataka has one more feather to its cap. KSFC has become an Authorised Collection Centre (ACC) to carry out e-stamping activity. e-stamping is a reliable, tamper-proof method of alternative system of printing of stamp papers. Available to you at the following KSFC Centres: Head Of ce, Rajajinagar, M.G. Road - Bangalore, Ramanagara, Bagalkot, Gulbarga, Koppal, Belgaum, Udupi, Mangalore, Bellary, Mysore, Mandya and Shimoga Branch Of ces : At all District Headquarters ^mavr` _mzh$ ã`yamo _mzh$: nwàxe H$: Bureau of Indian Standards IS / ISO 9001:2008 QMS YOUR PARTNER IN PROGRESS 14

17 India's 67th Republic Day was celebrated at the premises of Head Office, Karnataka State Financial Corporation, Bangalore by hoisting the Indian flag by Sri. B.H. Srinivasa Murthy, Executive Director-I. Senior Officers and officials graced the occasion. CONFERENCE ON CREATING FUTURE ENTREPRENEURS REVA University Bangalore in association with Kassia Bangalore had organised One Day Conference on Creating Future Entrepreneurs at REVA University, Rukmini Knowledge Park, Yelahanka Bangalore on 4th December MSMEs, Start Up Entrepreneur, Women Entrepreneurs, MSME Incubation, Experience sharing by entrepreneurs, Mudra Bank- SUDBI Support, Role of Nationalised Banks in supporting MSMEs. The main objective of the conference is to understand - how Entrepreneurship begins with a business idea and the success of an entrepreneur and how well the idea is executed and built upon. Of course, success doesn't come instantly and many times ideas are abandoned due to challenges and initial failures. However, there is a class of entrepreneurs that emerges triumphant against all odds. The conference had sessions on Journey of Entrepreneurs: Technical Sessions; Funding Ideas and Mentoring Sessions. The sessions covered several topics like Make in India, Cluster of During one of the sessions, Smt. Mamatha.A Senior Manager, Karnataka State Financial Corporation, informed the students about the benefits of schemes of Karnataka State Financial Corporation. New Interest Subsidy scheme for Women entrepreneurs and Scheduled Caste & Scheduled Tribe entrepreneurs, Scheme for First Generation Entrepreneurs were explained to them in detail. During the Q&A session, she clarified the queries raised by the students regarding procedures of availing financial assistance, investment subsidy, marketability of new products, repayment period, security aspects etc. The dignitaries in other sessions include Director, MSME-Bangalore, Shri THR Samad, Dy General Manager, SIDBI, President Kassia, Mr. H. N. Ramakrishnaiah, Founder- Director M/s Nandi Powertronics Pvt Ltd, Senior officers from Mudra Bank and Union Bank. Students in large number in final year Engineering and Management faculty attended the conference. 15

18 Success story of assisted unit of Karnataka State Financial Corporation M/s Shree Rajesh Ginning Factory, Dharwad M/s Rajesh Ginning Factory is located at Industrial Area, Dharwad engaged in cotton ginning with partners from the same family. Sri Narayana V Koparde, the Managing Partner has 30 years experience in the same line. Karnataka State Financial Corporation, Dharwad branch has assisted the unit with the financial assistance of Rs lakhs during August The unit is being managed well under the able administration of Sri Koparde with good family support. 16

19 Success story of assisted unit of Karnataka State Financial Corporation M/s Shanthala Projects, Priyadarshini Colony, Gokul Road, Hubli Sri Kadappa Mysore, the proprietor of M/s Shanthala Projects, a graduate degree holder in Instrumentation Engineering from SIT, Tumkur, Bangalore University. He has 20 years of experience in providing services to electrical power equipment Testing, Servicing and Calibration to Government and Private sector. Karnataka State Financial Corporation, Branch Office, Hubli has sanctioned loans aggregating to Rs lakhs between June 2011 to February 2015 to the above project located at Plot No: 24, Priyadarshini Colony, Gokul Road, Hubli, under Interest Subsdiy Scheme for Scheduled Caste and S c h e d u l e d Tr i b e E n t r e p r e n e u r s f r o m Government of Karnataka, for the activities of Testing, Servicing and calibration of Electrical transformers and reclamation of transformer oil. The unit is running successfully and has been regular in repayment to the Corporation. The Corporation is privileged to have been associate with unit. Story of Rags to Riches: Born to a Dalit farmer in sleepy village at Belligatti, Kundgol taluka, Dharwad district in January 1971, Mr. Kadappa lost his parents at early age. He started his career after graduation as a Service-in-charge at ELTEL, Bangalore and later commenced Shanthala Engineering at Bangalore in After realizing the potential, he shifted to Hubli, the business hub of North Karnataka and named it as Shanthala Power Limited [SPL] offering the services of testing, calibration, engineering services, project management consultancy, third party inspection and Turn Key services in the field of Electrical, electronics, Mechanical, Civil and Chemical Engineering services to the industries and utilities in India. The unit was certified with ISO- 9001:2008, accredited with NABL, started established a laboratory in Kota, Rajasthan for Energy Meters Testing, and got NABL accreditation. Mr. Kadappa Mysore played an important role in converting Shanthala into a Medium scale industry and received several awards and recognitions which include National Award for Small Scale Entrepreneurs, Rajiv Gandhi National Quality Award, Small Scale Service Industry, Special Commendation for the Golden Peacock HR Excellence Award, The Corporation is privileged to have been associated with such good customers for all their development/growth through years. Sri.Kalappa Mysore, the proprietor receiving the National Award for Small Scale Entrepreneurs during the year 2005 from Sri. Pranab Mukherjee. 17

20 KARNATAKA STATE FINANCIAL CORPORATION Interest Rate Table (Term Loans) effective from Sl. Category of borrowers/loans No. 1 a. All Term Loans (including WCTL) to Micro, Small and Medium Industries, b. Acquisition of ISO accreditation, c. SRTOs and Acquisition of private vehicles, d. Tourism related activities: Amusement parks, Restaurants, Travel and Transport, Tourist Service Agency, Hotels & Restaurants, Mobile Canteen/Catering, Resorts, Service Apartments, e. Health Care Services*: Assistance to Doctors/Qualified Medical Practitioners, Nursing Homes/Hospitals, and Electro Medical Equipment. f. Assistance to qualified professionals: Management Professionals, Medical Professionals, Accounting Professionals, Architects and Engineers, Veterinary Clinics. g. DG Sets, Mobile Generators, h. Godown / Warehouse and Convention centers. I. Office Automation j. Training Institutions. k. Industrial Estates, IT Software Parks, * Irrespective of the amount of investment in plant and machinery, the applicable rate of interest for loans under Health care Services will be on par with loans to MSMEs 1A Pricing of credit rated loans to Micro, Small and Medium Industrial units. a) External ratings of SE1A & SE2A on NSIC scale, SME1 & SME2 on non-nsic scale, AAA, AA or equivalent rating by other agencies and b) Minimum 70% marks in in-house credit rating Loans from Rs 50 lakhs to Rs 100 lakhs Loans above Rs 100 lakhs Interest Rate (%) B Rate of interest to Large Scale Industries Pricing of credit rated loans for Large Scale Industrial units. a) External ratings of AAA, AA or equivalent ratings and b) Minimum 70% marks in in-house credit rating Loans from Rs 50 lakhs to Rs 100 lakhs Loans above Rs 100 lakhs The pricing of credit rated loans mentioned at Sl No (1A) and (1B) shall not be applicable to any of the category of borrowers/loans from (b) to (k) at Sl No (1) and any of the category of borrowers/loans at Sl No (2) to (7) in the interest rate table 2 a. Construction / Buying Commercial Complexes, b. Construction activities like Residential Apartments, Villas, Group housing, Lay out formation/property Development c. Shopping Complexes, d. Ready built office space, Construction/Buying Ready built show rooms and Sales outlets, Development, Maintenance and Construction of Roads/Infrastructure Projects. e. Professional Education Institutes. f. Corporate loans to above activities (under Sl No. 2)

21 Sl. No. Category of borrowers/loans 3 a. Corporate loans, (excluding Corporate loans to activities at Sl No. 2), AMARA scheme, Bridge loans, Finance to existing assets, b. Entertainment industry (including Cinema Theatre/Multiplex, Production of feature films, TV serials, Dubbing/ Recording, Software for visual media publicity). c. Rental discounting scheme. Interest Rate (%) Privileged Entrepreneurs Scheme Micro Finance Activity 14.00** 6 Purchase of private vehicles by existing firms / promoters 12.00** 7 a) Wind Mill Power Generation Projects b) Solar Power Generation Projects ** No rebate/concession of any kind will be available NOTES TO THE INTEREST RATE STRUCTURE: I REBATES AND CONCESSIONS: A 1 REBATE i) A rebate of 0.50% will be allowed for all loans for prompt payment ** ii) (a) Additional rebate for prompt payment for loans from Rs 100 lakh and below Rs 300 lakh, to existing customers for 3 years or more, given for tangible asset based projects with in-house credit rating score of 70% and above. (b) Additional rebate for prompt payment for loans of Rs 300 lakh and above, to existing customers for 3 years or more, given for tangible asset based projects with inhouse credit rating score of 70% and above. 0.25% 0.50% For ii(a) customers total rebate will be 0.75% and for ii( b) customers it will be 1.00% The customers who were earlier with KSFC for 3 years or more closed their accounts and come again for loans with a break, may be extended the rebate applicable to existing customers provided the in-house credit rating score is 70% and above. In house credit rating is to be carried out by the Risk Management Department in respect of all loan proposals referred under ii(a) and ii(b) pertaining to additional rebate for prompt payment. The above rebate shall be allowed subject to the following, a) Payments shall be made on or before the due date through ECS /RTGS /NEFT /DD /Cash /Local Cheques. Repayment through outstation cheques will not be eligible for this rebate. b) If the due date for payment happens to be a holiday, the immediate next working day shall be considered as due date and for reckoning the prompt payment No rebate for prompt payment is available to Micro Finance Activity, Purchase of private 19

22 vehicles by existing firms / promoters, Wind Mill Power Generation Projects and Solar Power Generation Projects iii) 1.00% special rebate is extended to physically challenged entrepreneurs subject to producing physical disability certificate from the competent authority iv) 1.00% special rebate is extended to green technology products and services provided, 51% of the project cost comprises of green technology, viz, green building, equipment, energy and other purchasing required for the project 2 Maximum Rebate/Concession extended to any unit under different categories shall not exceed 3.00% including benefits mentioned at Sl No (1A) and (1B) in the interest rate Table. B. INTEREST RATE FOR SC/ST AND FIRST GENERATION ENTREPRENEURS a) The term loans to Scheduled Caste and Scheduled Tribe entrepreneurs will be sanctioned at the above applicable rates. However, effective rate to these entrepreneurs will be 4% p.a. The difference between KSFC lending rate and effective rate of 4% to the borrower will be met through the interest subsidy by GoK b) The term loans to First Generation entrepreneurs under Government of Karnataka Interest Subsidy Scheme will be sanctioned at the above applicable rates. However, interest will be subsidised over and above the 8.00% p.a, subject to a maximum of 6.00% II PENAL INTEREST A penal interest of 2.00% p.a. over and above the applicable interest will be charged in case of default, on the defaulted amount for defaulted period to all categories of borrowers. III LOAN OUTSTANDING TO DETERMINE INTEREST RATE While applying the interest rate, the total loan outstanding (i.e existing and proposed loan) will be the criteria for deciding the rate of interest. IV DEFERRED PAYMENT IN CASE OF SALE U/S 29 of SFCs ACT The rate of interest for deferred payment liability in case of sale of assets will be the highest current rate of interest rate under 1 and 2 of interest rate table. V TRANSFER OF LOAN LIABILITY The original contract rate of interest will continue to apply in case of transfer of loan liability. *************** 20

23 GLIMPSES OF NATIONAL VENDOR DEVELOPMENT PROGRAMME - IND EXPO 2016 Release of Souvenir by the dignitaries Shri D.V. Prasad, CMD, KSFC interacting with the vendors and entrepreneurs at the Expo Shri D.V. Prasad, CMD, KSFC visited one of the stalls of women entrepreneurs Shri D.V. Prasad, CMD KSFC being felicitated by the organisers Shri L.B. Nilogal, Executive Director-II, KSFC felicitated by the organisers. Sri. Ranga Prasad, Director, MSME looks on One of the stalls by the young entrepreneurs was honoured with a memento of IND EXPO 2016 by Shri D.V. Prasad, CMD, KSFC.

24 Edited,Published&OwnedBySri.M.A.Murthy,KarnatakaStateFinancialCorporation,ʻKSFCBhavanʼ,No.1/1,ThimmaiahRoad,Bangalore Ph.: andprinted B yshakthiprintech, # 16,3rdCross,2ndMain, R.C.P uram,bengaluru ph: info@shakthiprintech.comwww.shakthiprintech.com