WITH A government committed to bring progress in the industrial front, it is easy to establish a business venture in Kerala. State level financial institutions like Kerala State Industrial Development Corporation (KSIDC) and Kerala Financial Corporation (KFC) provides financial assistance to new industrial ventures.

The new units coming up in the thrust areas are eligible for an investment subsidy at the rate of 15 per cent and for other sectors the subsidy rate is fixed at 10 per cent.

KSIDC provides comprehensive support for investors who are planning to invest in Kerala. Procedures for setting up a project in Kerala have been thoroughly streamlined.

Once the project is formulated KSIDC will act as a nodal agency to help obtain all clearances from Government of India and the Kerala Government at the earliest possible time. All clearances can be obtained in a time period of 45 to 60 days.

A large range of domestic banks also offers a wide portfolio of products and services to the corporate sector. State-level institutions like KSIDC and national financial institutions like IDBI, IFCI and ICICI subscribe to the loan capital requirements of a project.

The loan is repayable in a time period of 8 to 10 years depending on the debt servicing capacity, with an initial moratorium of 2 years. Minimum promoters' contribution required for a project is 25 per cent of the project cost.

Part of the promoters' contributions can be obtained from State-level institutions like KSIDC. Maximum term loan eligibility is limited to 75 per cent of the costs of fixed assets. Promoters also can raise equity.

KFC provides financial assistance to all types of industries (existing or new) engaged in manufacturing or servicing activities with an upper limit ceiling of 12 crore rupees. For service sector the ceiling is Rs 10 crores.

Assistance range from short term loans to long term loans to equity type. An entrepreneur can select the scheme of his choice.

Decision on loan application is taken within 30 days and repayment period is 8 to 10 years with debt- servicing commencing after the initial cessation period of 6 to 24 months.

Automatic approval is given to those projects in the High Priority Industries where foreign investment in the equity capital of the Indian Company is up to 51 per cent and foreign equity covers the foreign exchange requirements for import of capital goods required for the project.

At the District Industries Centre (DIC) the Government has constituted a green channel committee under the Chairmanship of District Collector to provide license and other clearances for setting up industrial units, power, water supply and other facilities to the industries without any delay.

Government of Kerala provides infrastructure assistance by allotting Developed areas, Development plots, Industrial estates, Mini industrial estates, District mini industrial estate co-operative societies and Functional industrial estate centres.

The industrial plots are available under hire-purchase scheme, requiring the investors to pay only ten per cent of the total land cost and rest in ten equal instalments. Alternatively, one could opt for giving full payment.

Margin money credit DIC provides 50 per cent of the Initial investment the entrepreneur has to bear to get credit from commercial institutions, with a ceiling of 1 lakh rupees. It carries an interest rate of 11.5 per cent.

For Non-resident Keralites Margin Money loan amount is Rs 5 lakhs. 15 percent of the total capital investment, comprising buildings, land and machinery, with a ceiling of Rs 15 lakh is granted as subsidy for all the small-scale industrial units.