Govt announces concessional loan for young entrepreneurs

Kathmandu, Sept. 23: 

The government has announced to provide concessional loan to the entrepreneurs, and young individuals aspiring for business education and ventures.

With an aim of promoting entrepreneurship, create employment and increase domestic production, the government has published Integrated Procedures for Concessional Loan Grant, 2018.

The procedures has provisions to mobilise loans in six different areas - up to Rs. 50 million for commercial agriculture and livestock loan, up to Rs. 700,000 for educated youth self-employment loan, up Rs. 1 million for the foreign-returnee youth, up to Rs. 1.5 million for women entrepreneurship loan, up to Rs. 1 million for Dalit community enterprise development loan and Rs. 500,000 for high and vocational educational loan.

The procedures also includes Rs. 300,000 housing loan for the families affected by the 2015 Gorkha Earthquake.

Any Nepali citizen above 18 years of age having Personal Account Number (PAN) and not listed as the ‘defaulter’ in any Bank and Financial Institutions (BFIs) can apply for the loan facility, according to the procedures published by the Ministry of Finance (MoF) on Sunday.

However, the high and vocational education loan will be mobilised to the youth below 25 years of age.

Individuals or groups, organisations or companies operating an enterprise, students aspiring for technical or business education and earthquake victims can apply for the concessional loan.

Loan facility will be for the five years’ term and is available at all types of BFIs – commercial banks, development banks, finance companies and micro-finance banks. The actual size of the loan and installment will be decided by the respective banks.

BFIs extending the concessional loan facility to the youth should not charge more than additional two per cent interest to the grant provided by the government, and they are not allowed to ask for any charges other than interest of the loan.

Individuals seeking commercial agriculture and livestock loan should be above 18 years of age and should submit a brief proposal of enterprise operation and utilisation of the loan facility. If the project is above Rs. 1 million a Detailed Project Report (DPR) of the enterprise should be submitted to the bank.

Any applicant seeking money in group collateral should produce a reliable document proving the guarantee.

Educated youth self-employment loan can be mobilised to the youth below 40 years of age who have a university degree and obtained at least 7-day training provided by the government institutions like the Council for Technical Education and Vocational Training (CTEVT) and Cottage and Small Enterprise Office/Committee, Skill Development Training Centre.

Similarly, loan will be provided to foreign-returnee youth who has spent at least 6-month with work-permit in foreign countries. Such facility will not be provided to foreign Permanent Residency (PR) holders. The foreign-returnee should apply for the loan before 3-year of his return.

Likewise, women entrepreneurship loan and Dalit community enterprise development loan will be given to any women above 18 years age and having a proposal for enterprise operation.

With an aim of promoting agriculture and livestock sector business, increasing production and employment, utilising the skills of youth returned from foreign employment, motivating youth to take up skilled-based education and promoting women, marginalised people, earthquake victims in business the government has announced the new policy.

Published in The Rising Nepal daily on 24 September 2018.