KFC may be revamped to make it more entrepreneur-friendly
13 February 2003
Kochi: The state government proposes to revamp Kerala Financial Corporation (KFC) so as to make it a more entrepreneur-friendly organisation.
Kerala Finance Minister K Sankaranarayanan called a meeting of top officials of his department and KFC to make a review of the company's performance.
The objective of this state public sector company is to promote entrepreneurship by acting as an entrepreneur-friendly financing agencies. But the government's own assessment now is that its performance has been quite disappointing.
The minister told the meeting that the popular image of KFC is that it is creating all kinds of difficulties to those who have taken assistance from it. “This image has to change.“
He suggested that KFC should initiate a scheme for extending the facility of onetime settlement of outstanding dues to the entrepreneurs who have fallen into arrears. “They should also be given maximum possible concessions as an incentive to settle their dues.“
Similarly, the interest rates are going down everywhere at present, he added. “KFC couldn't retain its interest rates at a level higher than the one prevailing in the market under whatever circumstances. Its funds came from Small Industries Development Corporation as refinance assistance and from public bonds. Therefore, the interest rates fixed by it were related to the interest rates it had to pay for the funds mobilised by it. However, when the rates were coming down elsewhere, KFC could do business only if it reduced its interest rates, too.“