WE Funding — Soft Loan Scheme for Women Entrepreneurs

What is Kerala's soft loan scheme for women entrepreneurs?

WE Funding is the Kerala government's dedicated soft loan for women entrepreneurs, offered by the Kerala State Industrial Development Corporation (KSIDC), a corporation under the Kerala Industries Department. WE Funding sits in KSIDC's family of direct lending products, and its purpose is narrow and practical: to give a woman who already runs a manufacturing or service business a term loan at a rate well below what she would ordinarily pay, so that expansion is not blocked by the cost of credit.

WE Funding is a loan, not a subsidy. The money is repaid with interest. What the state contributes is the concession. A rate of 7.50 per cent against the commercial rates a small enterprise would otherwise face; together with relaxed collateral and guarantee conditions.

Key features

• Maximum assistance of Rs 50 lakh.
• Up to 80 per cent of project cost financed by KSIDC.
• Promoter contribution of at least 20 per cent from own funds.
• Concessional interest rate of 7.50 per cent, with no prompt payment rebate applied on top.
• Repayment of up to 6 years, including a moratorium of up to 6 months from the date of sanction.
• Relaxed collateral requirements and third-party guarantee provisions for eligible women applicants.

Who is eligible for WE Funding?

You can apply if:

• You are an existing woman entrepreneur in Kerala running a manufacturing or service business.
• The business uses industrial machinery or equipment.
• Women own and manage at least 51 per cent of the business.
• Your business is a proprietorship, partnership firm, LLP or private limited company.
• For a loan up to Rs 25 lakh, your average annual turnover is at least Rs 10 lakh.
• For a loan above Rs 25 lakh, your last financial year's turnover is at least double the loan requirement.
• You can bring in 20 per cent of the project cost from your own funds.

You are not eligible if:

• The business is brand new with no trading history. WE Funding tests past turnover, so a start-up idea cannot clear the eligibility test.
• Women hold less than 51 per cent of the ownership, or women are not in management control. A business registered in a woman's name but effectively run by someone else does not meet the test.
• Your turnover is below the Rs 10 lakh threshold for the loan size you want.
• You cannot bring the 20 per cent promoter contribution.
• The activity is neither manufacturing nor a machinery-based service.

How much can you borrow, and at what cost?

Take a project costing Rs 40 lakh. KSIDC can finance up to 80 per cent, which is Rs 32 lakh, and the promoter must bring the remaining Rs 8 lakh. At 7.50 per cent over a 6-year tenure, the interest burden is dramatically lower than a typical unsecured business loan, and the 6-month moratorium from sanction gives the unit time to install and commission the machinery before full repayment begins.

The Rs 50 lakh ceiling is on the loan, not on the project. A larger project can still be financed in part, with the balance met from own funds or another lender, subject to KSIDC's appraisal.

What documents are required for WE Funding?

How to apply for the women entrepreneurs soft loan

1. Prepare a project report covering the cost of the project, the machinery to be bought, the means of finance and your projected cash flow. This is the document KSIDC appraises, and a weak project report is the commonest cause of delay.
2. Check your turnover against the slab you need. Loans up to Rs 25 lakh need an average annual turnover of Rs 10 lakh; loans above Rs 25 lakh need last year's turnover to be at least double the loan sought.
3. Apply online through the KSIDC loan portal at ksidcloan.kerala.gov.in, or download the WE Mission application form from ksidc.org and submit it as directed.
4. Upload the ownership proof, audited financials, registration documents and promoter KYC along with the project report.
5. Speak to the district KSIDC officer for your district. KSIDC publishes a district-wise list of contact officers on its loan schemes page, and this is the fastest way to get an application unstuck.
6. Attend the appraisal, which covers the project's viability, the promoter's contribution and the security offered, before sanction and disbursement.

How to check your WE Funding application status

1. Log in to the KSIDC loan portal at ksidcloan.kerala.gov.in with the credentials used at application.
2. Contact the district KSIDC officer named for your district, who holds the file during appraisal.
3. Call KSIDC on 0471-2318922 or the toll-free number 1800-890-1030, or write to enquiry@ksidcmail.org, quoting your application reference.

Why women entrepreneurs' loan applications get rejected

• Turnover below the slab. This is the most frequent hard rejection — applying for Rs 30 lakh on a turnover of Rs 20 lakh fails the double-the-loan test.
• Women's ownership below 51 per cent, or ownership on paper without management control.
• Promoter contribution not available. The 20 per cent has to be demonstrably the promoter's own funds, not another borrowing.
• New business with no financial history, which cannot be appraised on past performance.
• Incomplete or unrealistic project report, particularly machinery costs without quotations.
• Existing loans in default, which affect the credit appraisal.

A woman entrepreneur who does not clear the turnover test is not out of options. The Kerala Industries Department's One Family One Enterprise scheme gives interest subvention of up to 6 per cent on a bank loan of up to Rs 10 lakh for new enterprises, and reserves 50 per cent of its beneficiaries for women. The Entrepreneur Support Scheme gives women entrepreneurs a 25 per cent capital subsidy up to Rs 40 lakh on a manufacturing unit. Both are more accessible to a first-time promoter than WE Funding.

Help and contact

• KSIDC head office, Thiruvananthapuram to 0471-2318922, toll free 1800-890-1030, email enquiry@ksidcmail.org.
• District-wise KSIDC officers, listed on the KSIDC loan schemes page.
• ksidcloan.kerala.gov.in for the online application.

Interest rates, ceilings and turnover conditions are set by KSIDC and are revised from time to time. Confirm the current terms with KSIDC before you commit to a project on the basis of an expected sanction, and never pay an agent a fee to "arrange" a KSIDC loan.