KATHMANDU, Aug 19: The government has approved the "Startup Enterprise Loan Operation Procedure, 2081" to facilitate extending loans of up to Rs 2.5 million to startups at subsidized interest rates.
According to the Procedure approved by the Cabinet on August 14, the Industrial Enterprises Development Institute under the Ministry of Industry, Commerce and Supplies will implement the startup loan program.
Arrangements have been made to grant concessional loans to engage entrepreneurs with the latest knowledge, skills and abilities in startup ventures. The institute will seek applications from those interested in taking startup loans through a public notice.
NOC's depot to open on all days except Dashain Tika day
An entrepreneur can submit a maximum of one proposal. A self-declaration confirming that no concessional loans have been received from other agencies must be provided. Entrepreneurs who have obtained concessional loans from other agencies will be ineligible for a startup loan until the loan is repaid.
The proposal will be evaluated by a committee of experts. While evaluating the latest thinking, use of technology in the enterprise, presentation of business proposals and job creation, use of indigenous raw materials, availability of infrastructure and financial condition and ability to take loans will be taken into consideration.
Loans will be given at concessional interest rates from a minimum of Rs 500,000 to a maximum of Rs 2.5 million. The maximum loan period will be for five years. One year after taking the first installment of the loan, entrepreneurs will have to start repaying the principal or interest amount.
There is a provision in the Procedure for giving start-up loans at three percent interest rate by considering the enterprise and project as collateral. For this, one or more banks will be appointed to provide such loans. The Procedure has opened the way to pay the amount to the loan protection agency from the amount allocated for the loan.
The start-up enterprise loan is available only to businesses that have been registered for no more than 10 years. Additionally, in any fiscal year following establishment, the annual turnover must not exceed Rs 150 million. The industry must be in a new form of business that has not been dissolved or broken.
Enterprises and businesses registered with the industry registration body as private firms, partnership firms, companies, or cooperative organizations are eligible to receive start-up loans.
This loan will not be granted to those who are not registered as an industry, who import goods and services from abroad and distribute them and who are blacklisted. According to the Industrial Business Act 2020, enterprises registered as holding and investment companies are also ineligible to receive this loan.
One or more banks will be designated to grant these loans. The loan amount will be deposited into a separate bank account, and any unspent funds in the account will be returned to the Federal Reserve Fund at the end of the fiscal year.