Kerala Government Loan Schemes for Startups & MSMEs

Are You a Startup or MSME from Kerala? Here’s How You Can Take Advantage of State & National Schemes

Kerala has emerged as one of India’s top-performing startup ecosystems with strong government support, innovation-driven culture, and a growing community of entrepreneurs. The state offers various loan schemes, grants, and incentives for startups and MSMEs under multiple departments and missions like the Kerala Startup Mission (KSUM) and Directorate of Industries and Commerce.

If you are a young entrepreneur, woman innovator, or artisan from Kerala, these government programs can help you scale your business and secure financial assistance. Let’s explore state-level and national-level schemes available for Kerala entrepreneurs.

Kerala State Government Schemes for Startups & MSMEs

1. Biotechnology Young Entrepreneur Award

This scheme encourages graduate and postgraduate students in Biotechnology(check scheme) to develop innovative bioscience-based startup ideas. The award promotes the commercialization of biotech innovations and motivates youth to become successful entrepreneurs in this field.

Key Benefits:

• Recognition and mentorship for biotechnology ideas
• Financial award for business development
• Support for idea-to-enterprise journey

2. Entrepreneur Support Scheme (ESS)

The Entrepreneur Support Scheme is one of the most popular MSME support programs in Kerala. It provides financial assistance to manufacturing enterprises based on their capital investment.

Highlights:

• Available for Micro, Small & Medium Enterprises
• Subsidy proportional to the investment
• Encourages both new and existing units to expand

3. Technology Transfer & Commercialization Support Scheme

Launched by Kerala Startup Mission, this program helps startups purchase or license technology from recognized government research institutions in India.

Benefits:

• Support for technology acquisition and commercialization
• Financial aid for product development
• Boost for startups working in innovation-driven sectors

4. Assistance Scheme for Handicraft Artisans

To preserve Kerala’s traditional handicrafts, this scheme offers one-time financial support for artisans to establish handicraft enterprises.

Features:

• Grants for eligible artisans
• Encourages entrepreneurship in the handicraft sector
• Helps artisans gain market access and modern tools

5. Soft Loan Scheme for Women Entrepreneurs

This scheme empowers women-led startups by providing soft loans up to ₹15 lakhs as working capital. Managed by Kerala Startup Mission, it supports women executing government or PSU projects.

Highlights:

• Up to ₹15 lakh soft loan
• Low-interest support
• Focused on women empowerment through business

6. One Family One Enterprise Scheme

This innovative initiative aims to establish one MSME in every family in Kerala. It promotes self-employment and entrepreneurship across rural and urban areas.

Benefits:

• Loan and interest subvention support
• Focus on women entrepreneurship
• Promotes local economic independence

7. Scheme for Margin Money Grant to Nano Units

Operated by the Directorate of Industries & Commerce, this loan-linked scheme supports micro and nano enterprises. It provides margin money assistance for manufacturing, job work, and service units with value addition.

Highlights:

• Assistance for very small-scale industries
• Encourages self-employment at local levels
• Boosts Kerala’s nano-manufacturing ecosystem

8. Revival and Rehabilitation Scheme for Defunct MSMEs

To help non-functional MSMEs and cashew units, this scheme offers capital grants and working capital incentives. It helps units revive operations and sustain employment.

Key Benefits:

• Capital and operational support
• Revival strategy for closed MSMEs
• Encourages rehabilitation and sustainability

National Government Schemes for Startups & MSMEs (Applicable in Kerala)

Kerala entrepreneurs can also access central government loan and subsidy programs that promote business innovation, employment, and women empowerment.

1. Prime Minister’s Employment Generation Programme (PMEGP)

A flagship credit-linked subsidy scheme under the Ministry of MSME, PMEGP provides financial assistance to individuals to start micro-enterprises.

Subsidy: 15%–35% based on location and category.
Goal: Generate employment and promote self-employment across India.

2. Stand-Up India

This scheme offers bank loans between ₹10 lakh to ₹1 crore for SC/ST and women entrepreneurs to set up new projects in manufacturing, trading, or services.

Focus: Inclusive entrepreneurship and financial independence.

3. Agri-Clinics and Agri-Business Centres (ACABC)

Promotes self-employment among agriculture graduates and professionals. It helps set up agri-service businesses offering consultancy, soil testing, or farm solutions.

Support: Training, credit linkages, and handholding.

4. Biotechnology Ignition Grant Scheme (BIG)

An initiative by BIRAC under the Ministry of Science & Technology, it funds early-stage biotech ideas and helps startups develop prototypes or proofs of concept.

Grant Amount: Up to ₹50 lakh.

5. New Swarnima Scheme for Women

Provides loans up to ₹2 lakh at 5% interest for women entrepreneurs from backward classes, promoting financial inclusion and social upliftment.

6. Credit Enhancement Guarantee Scheme for SC Entrepreneurs

This scheme guarantees loans for Scheduled Caste entrepreneurs, encouraging banks to finance new and growing SC-led enterprises.

7. Coir Vikas Yojana (Skill Upgradation & Export Promotion)

Kerala, being India’s coir capital, benefits immensely from this MSME Ministry initiative that supports training, skill upgradation, and export marketing for coir entrepreneurs.

How Kerala’s Entrepreneurs Have Benefited?

According to Kerala Startup Mission and MSME reports:

• Over 5,000+ startups registered under KSUM have received financial or incubation support.
• More than ₹150 crore has been disbursed in grants, soft loans, and subsidies.
• Women-led enterprises form over 35% of Kerala’s startup ecosystem.

These figures prove that Kerala is leading in innovation-driven entrepreneurship supported by government funding and incubation infrastructure.

How StartupFlora Guide?

StartupFlora assists entrepreneurs and MSMEs in Kerala to:

• Identify suitable state or national-level loan/subsidy schemes
• Prepare project reports and application documents
• Apply for startup registration and funding support

If you’re planning to start or grow your business in Kerala, StartupFlora can help you navigate the process smoothly and get your government incentives faster.

Frequently Asked Questions (FAQ)

Q1. What are the top startup loan schemes in Kerala?
A: The top schemes are the Entrepreneur Support Scheme, Soft Loan Scheme for Women Entrepreneurs, and Technology Transfer & Commercialization Support Scheme.

Q2. Can students apply for biotechnology startup funding in Kerala?
A: Yes, the Biotechnology Young Entrepreneur Award supports biotech students to convert ideas into enterprises.

Q3. Is there any Kerala government scheme for artisans?
A: Yes, the Assistance Scheme for Handicraft Artisans provides grants to help artisans start their own enterprises.

Q4. Are Kerala startups eligible for national MSME schemes?
A: Absolutely. Startups in Kerala can apply for PMEGP, Stand-Up India, BIG, and Agri-Business schemes.

Q5. How can StartupFlora help Kerala entrepreneurs?
A: StartupFlora helps in eligibility checking, document preparation, and application filing for both state and central subsidy programs.