KATHMANDU, March 16: While unemployment is increasing in the country, there is a growing interest in startups among the youth. Young people are drawn to startups as they can avail loans at concessional rates to initiate ventures.
Although the government will provide concessional loans at three percent interest rate to entrepreneurs with the latest knowledge, thinking, skills, and abilities, there is a significant number of people aspiring to become entrepreneurs by availing startup business loans. The Ministry of Industry, Commerce, and Supplies has planned to provide loans up to a maximum of Rs 2.5 million by introducing Startup Enterprises Credit Fund Working Procedures.
Although the Industrial Enterprise Development Institute has planned to provide startup enterprise loans to around 200 people, approximately 1,600 have applied. Umesh Gupta of the Institute said that there is an attraction towards becoming an entrepreneur by availing a startup enterprise loan. "As many as 1,658 people have applied for the call for proposals," said Gupta, adding, "The screening of project proposals is underway." He mentioned that many applications have been received in the fields of agriculture, tourism, and IT. According to him, there is a plan to disburse around Rs 250 million.
The startup ventures are related to agriculture and livestock, forestry, tourism promotion, entertainment, and hospitality. Similarly, there is a provision to submit proposals on issues related to human health services, education, teaching-learning, easy and safe transportation services, automobiles, traditional technology, and product and service improvement processes.
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Likewise, proposals can be submitted on issues related to mining and mineral research and development, household or daily living, food production and processing, waste management, environmental protection, disaster management, alternative and renewable energy, and climate change.
The institution has to send the proposer to the lending bank for credit appraisal. The bank will keep the approved business or project as collateral while disbursing the loan. The entrepreneur shall be responsible for the insurance of such business or project.
After the project is selected, the funds are planned to be given in three installments. The procedure mentions that in the case of bank disbursement of loans, loans up to Rs 500,000 will be given in one installment, loans up to Rs 1.5 million will be given in two installments, and loans above that will be given in three installments.
For loan protection, there is a provision that 25 percent of the disbursed loan should be kept in the startup enterprise loan protection fund within the limits of the approved budget.
The government has planned to spend Rs 1.25 billion this year for startups by researching innovation and enhancing new knowledge, skills, and capabilities for those who are unable to venture due to lack of capital.
It is the government's policy to encourage those who cannot start businesses due to lack of capital to engage in startup businesses. The government will support entrepreneurial groups that utilize innovative and creative thinking in the development, production, operation, and distribution of goods, services, and processes and operate them professionally.
The government's policy is to provide financial and non-financial facilities for the promotion and development of enterprises, capital mobilization, increase in domestic and foreign investment, support and facilitation in management, capacity development of stakeholders for startup economists, promotion of partnerships, and necessary support in manpower management. The enterprise will be encouraged to expand its business abroad.
During the monitoring by the regulatory body and the bank, provision of necessary information and data, quarterly submission of the progress report of the startup enterprise to the lending bank, and the duty to follow the instructions given by the establishment, committee, and the bank have been determined.
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Confederation of Nepalese Industries (CNI) have also been supporting startups and entrepreneurs of small and medium industries. The CNI has been encouraging startups that contribute to the digital economy, local knowledge-based employment, curbing talent drain, increasing exports, and attracting foreign direct investment."
