Under the Startup Loan Scheme launched by the Government of Nepal, for the fiscal year 2081/82, a total of 661 projects across the country have reached the stage of loan recommendation. The Industrial Enterprise Development Institute (IEDI) issued a public notice on Sunday, Baisakh 21, informing that selected entrepreneurs will be provided loans of up to NPR 2.5 million at an interest rate of three percent.
The recommended entrepreneurs must contact the designated branch of Rastriya Banijya Bank and proceed with the necessary formalities. If the concerned branch is not contacted within 45 days from the date of publication, the project proposal and loan recommendation will be automatically cancelled. The details regarding which entrepreneur should approach which bank branch have also been published on the Institute’s website. The bank will complete its evaluation process as per its procedures and distribute the loan. In case of non-repayment, recovery will begin as per the procedures itself. Additionally, the procedures disqualify those entrepreneurs who have not cleared previously taken concessional loans from other institutions.
Through this program, entrepreneurs will receive loans ranging from NPR 500,000 to NPR 2.5 million without collateral. The loan period has been fixed at five years. The bank will disburse up to NPR 500,000 in a single installment, up to NPR 1.5 million in two installments, and amounts above that in three installments.
In the current fiscal year’s budget, NPR 1 billion was allocated for startup loans. According to the Ministry of Industry, Commerce, and Supplies, out of the total budget, 3 percent will be used for the administrative costs of the Institute, 25 percent will go to the loan security fund, and the remaining amount will be disbursed to entrepreneurs as loans. Last year, 165 entrepreneurs received loans amounting to NPR 210 million through this program, of which NPR 18 million has already been repaid, according to the ministry. The ministry further stated that, on average, the entrepreneurs who received loans last year have created employment for four to five people each.
Although the government has been announcing startup loan distribution through the budget for the past four years, the program was only implemented from last year.
Entrepreneurs recommended for loans must contact the designated bank branch with the following documents: a copy of their business registration and renewal certificate, a copy of their PAN or VAT registration, a copy of their citizenship certificate, the tax clearance certificate for the fiscal year 2080/81, three passport-sized photos, the official stamp of the business, and a copy of the lease agreement if the business is being operated from a rented location.
According to available information, the selected projects will be able to receive their loans from Rastriya Banijya Bank within four to five days. The Institute has stated that the bank will complete the necessary evaluation and disburse the first installment within seven days.
The Institute further informed that, to facilitate the startup loan distribution, a public call for project proposals was made in Bhadra. During this period, a total of 5,158 entrepreneurs submitted applications either online or physically. Out of these, 1,314 applicants were shortlisted for presentations. The qualified applicants were then asked to present their proposals, including photos and videos, on scheduled dates and times.
Out of those, 1,073 applicants gave presentations. The evaluation was based on the business’s photos, videos, financial details, and the Q&A session conducted by the evaluation committee. The average score from the presentations and the credit appraisal score provided by the bank were combined to determine the total score. Based on this total, applicants who scored at least 50 percent were prioritized and selected.
Under this scheme, special priority has been given to businesses based in agriculture and animal husbandry, information technology, tourism, green enterprises, furniture industries, small industries, food processing, cafes and restaurants, iron and glass production, hostel operation, sports and music-related businesses, ready-made garments, and handicrafts.
To be eligible for a loan, the business must have been registered for less than 10 years, must have an annual turnover of less than NPR 150 million, and must not be a restructured company.
The government has launched this program with the strategic objective of inspiring youth toward entrepreneurship, expanding employment opportunities within the country, and contributing to the overall economic transformation of the nation. Additionally, to enhance the effectiveness of this initiative, the government plans to implement the program in a more robust and results-oriented manner from the upcoming year.
