Kerala Stressed MSMEs Revival & Rehabilitation Scheme
By Directorate of Industries and Commerce, Government of Kerala
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Quick Answer
A Kerala state government scheme providing financial and handholding support up to ₹5 lakh to revive stressed and sick micro, small, and medium manufacturing enterprises.
- Funding amount
- Up to ₹5L
- Funding type
- Grant
- Application deadline
- Rolling
- Eligible stage
- Revenue
- Location
- Kerala
- Registrations needed
- Udyam registration
About this grant
The Kerala Stressed MSMEs Revival & Rehabilitation Scheme is a critical initiative by the Government of Kerala designed to breathe new life into struggling manufacturing enterprises across the state. Many micro, small, and medium enterprises (MSMEs) face significant challenges, leading to financial stress and underutilized assets. This scheme aims to address these issues by providing targeted financial assistance and expert handholding support, enabling these units to convert non-productive assets into productive ones and regain economic viability. The program is specifically tailored to support units that are classified as 'stressed' or 'sick' according to RBI guidelines and have a clear potential for revival based on a definite Revival Project Report. It offers a lifeline to manufacturing businesses that have been in commercial production for at least one to two years but are now facing difficulties, helping them overcome financial hurdles and contribute to Kerala's industrial growth. The scheme emphasizes a structured approach to rehabilitation, involving expert committee recommendations to ensure effective utilization of funds and sustainable revival.
Eligibility
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Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Grant providers
Benefits & Funding
- Amount
- Up to ₹5L
- Fund type
- Grant
- Equity
- Equity-free
- Repayment
- Non-repayable
What You Get
The scheme offers substantial financial assistance, with the total entitlement capped at ₹5 lakhs per applicant unit, available as a one-time support. This includes a Margin Money Grant of up to ₹2 lakhs, covering 50% of the margin insisted by banks/financial institutions for additional working capital and term loans. An Interest Subvention Assistance of 6% per annum, up to ₹1 lakh, is provided on a reimbursement basis for the first year of additional term and working capital loans. Additionally, units can receive Restart Expenses of up to ₹1.50 lakhs for new additional/balancing plant & machinery (if no term loan is availed) and up to ₹1.00 lakh for essential repair and maintenance. Assistance for Clearance of Statutory Dues is also available, covering 50% of dues up to ₹40,000 for agencies like KSEB, GST, and the Pollution Control Board. Furthermore, the Cost of Revival Project Report preparation is fully reimbursed, up to ₹10,000. Units are obligated to restart within one month of receiving assistance and operate continuously for five years, failing which the assistance may be recovered.
- Disbursement
- Milestone Based
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
The selection process for the Kerala Stressed MSMEs Revival & Rehabilitation Scheme heavily relies on the assessment and recommendations of an Expert Committee. Applications undergo scrutiny to confirm that the MSME meets the criteria of a 'Sick Unit' and, crucially, is identified as 'Potentially Viable' for revival. The Expert Committee evaluates the proposed Revival Project Report, assessing its feasibility, the unit's commitment to implementing the plan, and the effective utilization of the proposed financial assistance. This committee's recommendations are central to the approval of loan restructuring, margin money grants, interest subventions, and other forms of assistance, ensuring that support is directed towards units with the highest potential for successful rehabilitation.
Application Process
- 1
Visit Online Portal
Access the Directorate of Industries & Commerce website to begin your application.
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How to apply
Four steps from draft to disbursement — one action each.
- 1
Draft your application
Answer the form inside the grant tracker — AI drafts each response using your past answers, so you're not starting from a blank page.
- 2
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 3
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 4
Submit on the official portal
Use the official application link and verify all details before final submission.
- 5
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Program templates & documents
Files the program publishes for applicants — download these and apply in the prescribed format.
Frequently Asked Questions
What is the primary objective of the Kerala Stressed MSMEs Revival & Rehabilitation Scheme?
The scheme aims to provide financial and handholding support to micro, small, and medium manufacturing enterprises (MSMEs) in Kerala that are showing signs of stress or are classified as sick units, helping them convert non-productive assets into productive ones and achieve sustainable revival.
What is the maximum financial assistance available under this scheme?
The maximum assistance admissible for each unit, combining all reliefs and assistances, is limited to ₹5 Lakhs, provided as a one-time support.
What types of financial assistance are offered?
The scheme offers various types of assistance, including Margin Money Grants (up to ₹2 lakhs), Interest Subvention (6% up to ₹1 lakh), grants for Restart Expenses (for plant & machinery, repairs), assistance for Clearance of Statutory Dues (up to ₹40,000), and reimbursement for the Cost of Revival Project Report (up to ₹10,000).
Who is eligible to apply for this scheme?
Eligible applicants include manufacturing MSME units in Kerala that are not on the Negative List, have filed EM Part-II/UAM, are defined as 'Sick Units' by RBI, and are deemed 'Potentially Viable' for revival by an Expert Committee. Units must also be independent legal entities and have been in commercial production for at least one to two years.
What are the obligations for an applicant unit that receives assistance?
Applicant units must provide all required details accurately, utilize the assistance as agreed, restart commercial operations within one month of receiving financial aid, and continue functioning for a minimum period of 5 years. Failure to comply may result in the recovery of the assistance under the Kerala Revenue Recovery Act.
Are there any specific industries or units excluded from this scheme?
Yes, a 'Negative List' specifies ineligible units, including photo studios, breweries, sawmills, certain asbestos processing units, metal crushers, steel re-rolling mills, calcium carbide, cashew industrial units, and certain power-intensive units.
Sources
Data on this page is compiled from official program and provider references.
News
- CS directs time-bound revival action for recoverable MSMEsrisingkashmir.com · last month
Source: Google News aggregated
