Kerala State Financial Enterprise

Kerala State Financial Enterprises limited started functioning on 6 November 1969 with Thrichur as its base. It started with a capital of Rs.2, 00,000 ($5130 and 45 employees and 10 branches). KSFE showed profits from its first year of working. Today, with over 38 years of functioning KSFE is having 274 branches and 5 regional offices in Kerala. More than 4000 people work at KSFE and about 2 million people are associated with it.

Origin

‘Chitti’ was a part of Kerala’s unorganized financial services from long. ‘Chitti’ always gave the convenience of many people being involved at a time and flexibilities like reaping the benefits according to the financial needs of the people involved. And these democratic and flexible characteristics of Chitti made it popular. But lack of efficient rules and regulations often made Chitti system act against the interest of the society. Many of financially backward people suffered because of the high interest rates of the unorganized Chitti system. At this point, the Kerala government initiated the establishment of a Chitti organization. Thus the Kerala state financial enterprise, better known as KSFE was formed. KSFE gave Chitti the status of an effective financial instrument as against its earlier status of an unregulated financial transaction. With time KSFE modernized Chitti by value additions to the earlier Chitti system. For example, it regulates the distribution of Chitti. This 30% limit was a precaution against the needy involved in Chitti from falling into further debts because of Chitti. Here the flexibility factor was facing a problem and it raised protest from the public. This lead to the New Chitti Loan (NCL) which facilitated the people involved in Chitti to avail loan up to 50% of the Chitti amount. Thus KSFE was able to keep the ethical value added to Chitti by 30% limit along with addressing the flexibility problem effectively. Along with these, KSFE made itself attractive by adding services such as pass book loans. Their allocation of a part of profits to the people involve in Chitti, as in ‘Sammana Chitti’ also became much popular.

KSFE also succeeded in keeping with the trends. It is aiming the automation of all its branches by the financial year of 2007-’08. It formed ‘vision 2010’ with the target of being a Rs.500 Crore ($20million) organization.

KSFE is quite a self-sufficient organization. Till now it gave more than Rs.385 Crores as service charge, guarantee commission and profit tax to state and central governments.

Vision

To become a significant player in the financial services sector by
* Providing a whole range of quality services and products
* Adopting technology and benchmark standards in customer service and performance
* Spreading wings beyond the borders of Kerala, on a global level
* Retaining the pre-eminent role in Chitty business
* Continuing focus on extending resources to the Govt. of Kerala
* Sustaining commitment to the weaker sections of society, as the neighborhood institution for support, trust and security

External links

* http://www.ksfe.com