Out of a total of 5,158 project proposals that were submitted for startup enterprise loans this fiscal year, 1,314 applications have been shortlisted, according to the implementing body Industrial Enterprise Development Institute (IEDI), which has invited the selected projects for their final presentations.
The shortlisted applicants will now present their business plans to the IEDI evaluation committee. Following the presentation, selected applicants will receive collateral-free (without requiring land and building as collateral while the approved business or project itself will serve as collateral) loan of up to NRs 2.5 million at an interest rate of 3%.
During the pitch, businesses will be evaluated on the basis of detailed description of the product or service, market analysis, growth potential and a SWOT (strength, weaknesses, opportunity and threats) analysis of their projects. They will also have to discuss current and projected employment figures and demonstrate their present financial standing along with projections for the next three years.
The 1,314 shortlisted applicants represent 25.62% of the total applications. Those rejected did not meet the requirements such as failing to demonstrate their new and innovative ideas; lacking proper legal registration, not submitting necessary documents such as Permanent Account Number (PAN) certificate and tax clearance certificate from previous fiscal year or showing a lack of transparency.
These loans are expected to be disbursed by March, 2025.
According to the working procedure that guides the loan program, these startup loans will have to be repaid based on the loan amount. A loan of up to NRs 5,00,000 must be repaid in a single installment. Loans of up to 15,00,000 rupees in two installments, while loans of up to NRs 25,00,000 should be settled in three installments. If the loan is not repaid by the due date, the bank is authorized to freeze the startup’s bank account.
Earlier this fiscal year, the government allocated a budget of one billion rupees under the ‘Startup Fund’, with IEDI under the Ministry of Commerce, Industry and Supplies calling for submissions of proposals on August 27, 2024.
In the previous fiscal year 2080/81, the government allocated a budget of NRs 250 million under ‘Startup Enterprise Loan program’ where it disbursed over NRs 190 million concessional loans to 165 projects out of the 183 selected projects.
