Policy for collateral-free loans to Nepali migrant workers at final stage

Kathmandu, July 6

The Procedures for Providing Collateral-Free Loans to Nepali migrant workers has reached its final stage, Minister for Labour Employment and Social Security Sharat Singh Bhandari informed on Sunday.

Speaking at the final round of discussions to finalise the draft of the procedures held at the Ministry of Labour, Employment and Social Security (MoLESS), he said the procedure would enable workers to access simple and collateral-free loans.

He expressed concern over Nepali workers falling prey to exorbitant interest rates charged by loan sharks and stated that once implemented, the procedure will enhance their access to finance.

“Of the three 'D's - Debt, Death, and Digital Trap - that I often mention, this policy addresses the debt trap. Workers will be debt-free by the time they return from working abroad, and will also be able to benefit from state-arranged schemes such as social security and insurance,” said Minister Bhandari.

According to him, the procedures align with the government’s policy to offer unsecured loans to those going for foreign employment. He suggested that priority should be given to banks affiliated with the Social Security Fund.

“The key objective is to ensure that bank loans are secure, migrant workers can access financing easily, and they are protected from local loan sharks in their villages,” he said.

The procedure proposes that workers travelling to Gulf countries should be eligible for loans of at least Rs. 200,000, while those heading to Europe may access up to Rs. 500,000.

Saurabh Pokharel, a member of the drafting team from Nepal Rastra Bank, pledged full support for the implementation and suggested refining the procedure to clarify the loan recovery process, informed Minister's Secretariat in a statement.

Similarly, Anil Sharma from the Nepal Bankers’ Association praised the concept and assured that banks would fully cooperate in its implementation.

Labour Secretary Dr. Krishna Hari Pushkar noted that the procedure had remained stalled for a long time and stressed the need to move it forward without delay. He emphasised the importance of providing easy and accessible loans so that migrant workers could manage repayments more effectively upon returning from abroad.

Published in The Rising Nepal daily on 7 July 2025.