Central GovernmentVerified

Interest Subsidy Scheme for Scheduled Caste/Scheduled Tribe Entrepreneurs

The scheme aims to encourage SC/ST entrepreneurs to establish micro or small-scale service enterprises & to expand, diversify, or modernize their existing units. Under this scheme, a loan amount ranging from a min. of ₹20.00 lakhs to a max. of ₹1,000.00 lakhs is provided at an interest rate of 4%.

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Official Source ↗

Source: myScheme.gov.in ↗Last verified: 19 Aug 2026·YojnaGuru is not affiliated with or endorsed by any government body

About This Scheme

The Government of Karnataka has introduced the interest subsidy scheme on loans sanctioned to Scheduled Caste (SC)/Scheduled Tribe (ST) entrepreneurs by Karnataka State Financial Corporation (KSFC). The scheme aims to encourage SC/ST entrepreneurs to establish micro/small scale/services enterprises to expand/diversify/modernization of their existing units.

Benefits

₹20.0 L · one-time

Loan Amount:

Minimum loan amount under the scheme is ₹20.00 lakhs.
Maximum loan amount under the scheme is ₹1,000.00 lakhs which includes term loan and one time working capital term loan based on the project proposal but working capital term loan is restricted to maximum of ₹50.00 lakhs. However, repetition of working capital term loan sanction is not allowed.
The loan can be availed for establishing new units or expanding / diversifying / modernizing their existing units for more than one occasion, but the aggregate loan extended shall not be more than maximum limit under the scheme.

Rate of Interest:

The effective rate of interest is 4% only.

Repayment Period:

The repayment period is 8 years including moratorium period in case of loan upto ₹500.00 lakhs and upto 10 years in case of loan above ₹500.00 lakhs but below ₹1,000.00 lakhs.

Eligibility

Note: You may be eligible based on the information shown. Please verify the official eligibility requirements before applying.

•
The unit shall be fully owned by SC / ST entrepreneurs i.e., all promoters in proprietary / partnership / company shall belong to SC/ST community only.
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The ownership / share holdings of units even in part by other than SC/STs are not eligible for interest subsidy.
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Entrepreneurs either can be SCs / STs or both.
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Others terms &amp; conditions:
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The units which have availed the interest subsidy under any other scheme of Government of Karnataka/Government of India are not eligible for interest subsidy under this scheme.
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To be eligible for interest concession under the scheme, the units should not be in default in repayment to KSFC.
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KSFC is at liberty to consider any amount of project cost. However, the interest subsidy is restricted to ₹1,000.00 lakhs of the loan. Interest amount on the balance loan amount beyond ₹1,000.00 lakhs is required to be borne by the entrepreneurs.
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KSFC may sanction loans with normal applicable rate of interest, the effective interest rate to be paid by the beneficiary / borrower will be 4%. The difference between the normal lending rate of KSFC and effective interest rate of 4% will be reimbursed by Government of Karnataka.

Required Documents

✦
Passport-size Photograph
✦
Proof of SC/ST status of the entrepreneurs
✦
Bio-Data Net Worth Statement
✦
Affidavit ( Affidavit-SC-ST.pdf )
✦
Audited financial statements (if expanding an existing unit)
✦
Bank account details for loan disbursement
✦
Any other documents as specified by KSFC during the loan process

✦ Required ◦ Optional

How to Apply

IIn-person

Step 1: The interested applicant should visit (during office hours) the Branch Office (SC-ST-E.pdf) and request a hard copy of the prescribed format of the application form from the staff exclusively entrusted to issue and collect filled-in applications.

Step 2: In the application form, fill in all the mandatory fields, and attach copies of all the mandatory documents (self-attest, if required).

Step 3: Submit the duly filled and signed application form along with the documents to the Branch Office.

Step 4: Request a receipt or acknowledgment from the concerned authority to whom the application has been submitted. Ensure that the receipt contains essential details such as the date and time of submission, and a unique identification number (if applicable).

Quick Info

Level: Central Government
Max benefit: ₹20.0 L

Available In

Karnataka

Data Sources

https://www.myscheme.gov.in/schemes/issscste ↗Accessed Today