Kerala Financial Corporation (KFC) doubles its business
Kerala Financial Corporation (KFC) doubles its business
Thiruvananthapuram, Apr 7 (UNI) Kerala Financial Corporation (KFC), Kerala based the leading financial institution, has recorded an all-time high portfolio of Rs 4,700 crore for the year ended March 31, 2021.
The provisional figures show an immense improvement of Rs 1,349 crore over previous years figures of Rs 3,351 crore. Loan approvals and repayments have also increased significantly over the previous years.
During the financial year 2020-21, loan approvals amounting to Rs 4,139 crore were issued. This is an improvement of 244 % over previous financial year sanction figures of Rs 1,659 crore.
Loan disbursements also increased from Rs 1,447 crore to Rs 3,729 crore. That is, an increase of 258 %. Even during the crisis, loan repayments increased by 262 %. Loan repayments increased considerably from Rs 1,082 crore in the previous year to Rs 2,833 crore.
Interest income rose 131% to Rs 436 crore from Rs 334 crore during the previous year. This was facilitated by the sharing of defaulters' information to CIBIL and tightening of recovery procedures.
“Our goal for the year was a complete overhaul of KFC. Rather than being an ordinary financial institution, KFC has remodelled itself to become an institution that offers customised loans and exemplary services to varied business sectors," Tomin J Thachankari, CMD, KFC, said.
He added that the centralization of the credit process and providing the opportunity for clients to interact directly with top officials including CMD has expedited the growth.
During the year, the Corporation has sanctioned new loans of Rs 256 crore to 419 industries struggling due to COVID-19 crisis. Furthermore, 1937 new ventures were assisted under the Entrepreneurship Development Scheme.
Loans up to Rs 1 lakh were provided under this scheme without any collateral. The Corporation also introduced various schemes providing assistance without any collateral requirement. This included schemes for startups, loans for electric vehicles, loans for converting buses to CNG, special loans up to Rs 50 lakh to hotels and the facility of discounting bills for government contractors.
The corporation had also reduced the base lending interest rate to 8 % as it was able to raise funds at 6.5 per cent.
CMD said that KFC expects a better net profit than the previous years, owing to the better performance and reduced costs.
Special loan scheme was introduced for units affected by the COVID-19 pandemic. Loans amounting to Rs 256 crore were sanctioned to 419 existing and new ventures. In addition, a moratorium was allowed to all units during the lockdown period. Special schemes have also been set up for units engaged in the manufacture of masks and sanitizers.
He said 1937 new ventures were assisted under the Entrepreneurship Development Scheme. Loans up to Rs 1 lakh were given without any collateral. Special preference was given to women and persons with disabilities.
Loans up to Rs 50 lakh were offered at 7% under liberal terms and conditions. For the returning NRKs who have lost their jobs abroad due to COVID-19, the scheme was offered at an interest rate of 4% in association with NORKA.
Credit approvals were issued to ten new startups during the year without any collateral security. A New scheme was introduced to fund up to 80% of the work order received by startups, up to a maximum of Rs 10 crore, at an attractive rate of 10% interest. Similarly, up to Rs 1 crore is being provided for the expansion of innovative prototypes in line with the development goals of the Government.
There has been a significant increase in repayment, since the information on defaulters were shared with CIBIL. About 24,000 records have been uploaded so far.
Among the financial institutions under the Government of Kerala, KFC is the first to share defaulters data with CIBIL. In addition, data is also being shared with other credit bureaus like Equifax, Experian and CRIF Highmark.
The Corporation has taken a soft approach to customers who are struggling due to the pandemic. However, strict action has been taken against those who have deliberately defaulted on their repayments.
SARFAESI procedures have been expedited and resolution agents have been empaneled for this purpose. Units acquired by KFC are put up for sale through e-auction and a special loan scheme has been introduced for the purchasers.
KFC has successfully issued bonds of 250 crore during the year. The issue was made at an all-time best rate any state financial institution across the country has managed so far. The Corporation’s strong financial base helped in getting even better rates than the major public sector banks. The Bonds with 'AA' rating has a tenure of 10 years.
Thanks to its high capital adequacy ratio and low NPA, the Corporation, on January 1 2021, reduced its base rate from 9% to 8%. It was also facilitated by the lower cost of funds. In this way, the concessions received by the corporation due to better performance were passed on further to its customers.
KFC's website was revamped and all the loan applications are accepted online. High speed one-to-one internet and video conferencing system has been implemented in the branches of the corporation.
This expedited the procedures and communication between the branches and the head office. Moreover, repayments to special schemes are now being made on a daily or weekly basis for convenience. For this, digital systems like POS and Google Pay have been utilised.
As a measure to keep the expenditures in check, strict controls were introduced and all payments are now made directly from the head office. Additional telephone and internet connections, which were incurring high costs, were cut off.
Older vehicles were auctioned, and vehicles were rented for office use. These measures have helped in reducing the operational costs by 10%.
More agencies were empanelled for customer verification, project report preparation and technical valuation to expedite the loan process. New loan proposals are directly analysed by the head office officials in the presence of the clients.
Loan processing has also been centralized. KFC is the only financial institution that facilitates direct interaction of clients with senior officials, including CMD.
Further appointments were made to the posts of Assistant and Assistant Manager through PSC. More women were appointed to key positions with the aim of women empowerment.
The Corporation has also launched a platform for its employees to interact with business leaders to improve their industry knowledge. Global business leaders such as MA Yusuf Ali, Ravi Pillai, Azad Moopan and Kochouseph Chittilappilly interacted with KFC employees and provided insights to their ventures.
Special Bill discounting scheme has been extended to Government Contractors to discount their bills without any collateral. KFC is also providing unsecured loans for converting buses to CNG and for purchasing electric vehicles.
Special loans of up to Rs 50 lakh were introduced to revive the tourism sector. Such loans are extended to hotels on a daily repayment basis with no collateral.
New Core Banking Software / Debit Card
KFC has decided to adopt Finacle, one of the leading core banking software in the country, in view of its growth and technical requirements for future projects. It will be operational soon.
The Corporation is also introducing debit cards in collaboration with public sector banks. KFC debit cards can be used to make all transactions like regular debit cards, including ATMs, POS machines and online transactions. In addition, the cards can be linked to KFC's mobile app to make high volume transactions. This is the first time in the state that a government financial institution is launching debit cards.