Finances can often be a dwindling affair. And while we all work towards maintaining a healthy financial situation that is turbulence-proof, you never really know what is coming your way; the future often is unpredictable. 

In dire situations, one could lose on an opportunity if sound finances are not in order, and the loss of opportunity can have lifelong repercussions. In order to extend its support and to encourage skill development in the state of Karnataka through Self Help Groups (SHGs), the Karnataka government is allowing the people a chance to repair their finances which may have gone awry due to the pandemic and the subsequent job loss scenario. 

About the Karnataka Kayaka Yojana Loan

Under the implementation of the scheme, the government of the state will provide loans of up to ₹10 lakh to these SHGs from the cooperative sector banks. These loans will be interest-free and will go a long way in offering SHGs the platform to generate revenue and resume the flow of income in the life of those who work in these groups. 

This scheme will encourage entrepreneurship and will eventually align its goals with the mission and the vision of the Make In India programme, an initiative undertaken by the Central government pan India. 

The scheme happens to be in accordance with the long pending demand of self-help groups to provide them with a zero-interest loan to boost their activities. These SHG loans will provide loans of up to ₹5 lakh under the Kayaka Yojana and these loans will be issued at a 0% interest rate. However, loans ranging from ₹5 lakh to ₹10 lakh would be offered at a 4% interest rate. 

The eligibility criteria to apply for the Karnataka Kayaka yojana

The prime criteria of applying for this scheme is that the applying organisation has to be an SHG and that these SHGs have to be located within the borders of the state. 

Salient features of the Karnataka Kayaka scheme

The key feature of the scheme are mentioned herewith: 

  • Development of SHGs: The Kayaka scheme has been designed to bring about the development of SHGs that are operating in the state. These SHGs will work towards increasing skill development and entrepreneurship among the people. 
  • Availability of loans: SHGs can get easy loans from banks and raise their activities for the betterment of skill development among the people. 
  • Loan amount: the state government will offer loans ranging from ₹1 lakh and ₹10 lakh to SHGs. 
  • Interest on credit: loans less than ₹5 lakh will have 0% interest charged, whereas loans between ₹5 lakh to 10 lakh will have 4% interest charged. 

In conclusion

SHGs are a great initiative towards making India a self-reliant nation. Encouraging SHGs encourages skill development, and thereby encourages more internal revenue generation that is great for our economy and also for the people working in these organizations. With such schemes in place, State governments ensure that no local business suffers the wrath of uncertainty.


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