Process authorized for startup business loan disbursement

'Startup Enterprise Loan Operation Procedure, 081' has been approved by the Ministry of Industry, Commerce, and Supply. On July 30, the Ministry gave its approval to the process. The Appropriations Bill states that, in light of the procedure's introduction, it must be approved annually in order to award loans to newly established businesses.

The foundation said that the loan disbursement process for the current fiscal year will commence shortly after the processes were authorized.

The institute's executive director, Umesh Gupta, stated that although a physical application process was available last year, a mechanism for online applications is being developed for this year as well. "We will soon be accepting applications for startup loans to be disbursed for the current fiscal year," he stated. "We are developing an online application system to receive applications." This year, we will arrange for both of us to be physically present, as we did in the past. According to Gupta, an online application system is being developed so that the district's entrepreneurs won't need to travel to Kathmandu in order to apply for loans.

It is indicated in the method to make the work related to subsidized loans simpler, clearer, and more transparent in order to encourage entrepreneurs with the most recent knowledge, thinking, talents, and abilities to participate in start-up ventures. As per the protocol, startup loans will be provided with a three percent interest rate and would take into account businesses and projects as collateral. The procedure states that a business cannot be more than ten years old and that its annual turnover cannot be more than 150 million rupees in any given fiscal year. The process allows for the appointment of one or more banks to offer startup loans.

 The loan amount must be transferred to a different bank account, and at the conclusion of the fiscal year, any money still in the account must be given back to the Federal Reserve Fund. The Industrial Business Development Foundation will oversee the implementation of the startup lending program.

This loan will have a maximum five-year term, and the repayment schedule calls for beginning one year after the first installment is taken out. The protocol also states that this loan will have an annual interest rate of three percent. As per the protocol, the bank must retain the authorized enterprise or project as security for the duration of loan disbursement. It is the responsibility of the business owner to handle project or business insurance. The method states that the lending bank may impose an administrative or service fee to the linked entrepreneur up to a maximum of 0.1% of the loan amount.

Despite years of government budgetary mentions of lending to startups, 65 borrowers have reportedly benefited from the 'Startup Enterprise Loan Operation Procedure, 080' that was released in the most recent fiscal year in accordance with the Appropriations Bill. Of the 183 projects that were chosen to receive beginning enterprise loans, 165 have received funding from the Industrial Business Development Foundation. The foundation's executive director, Umesh Gupta, stated that the startup project entrepreneurs had received loans totaling over 17 crore rupees. "Out of 183 selected last year, we have given 165 people, 5 of them have been blacklisted and 2 have said they will not take it," Gupta stated. "The process to provide loans to the remaining 11 entrepreneurs has gone ahead."

During the period of January 19 to February 10, 2008, the Foundation received proposals for'startup' enterprise financing from 1,658 enterprises. Only 335 of the 394 ideas chosen from the list of qualified proposers in the first phase—of which 183 were chosen on May 25—were presented by the foundation on May 9. A list of 183 projects suggested for beginning enterprise loans was released by the foundation on May 25. Only 335 of the 394 ideas chosen from the list of qualified proposers in the first phase—of which 183 were chosen on May 25—were presented by the foundation on May 9. A list of 183 projects suggested for beginning enterprise loans was released by the foundation on May 25.

In the current financial year's budget, the government has declared that it will establish a 'Nepal Startup Fund', valued at Rs 1 billion, to cater to the financial requirements of entrepreneurs starting their own businesses. "A startup board will be formed to facilitate and regulate startup entrepreneurs in order to increase youth participation in business." The budget states that "an entrepreneurial environment will be created by developing an ecosystem for startups and innovation." To help startup entrepreneurs with their financial needs, a 1 billion Nepal Startup Fund will be formed. The budget also states that each province would have business incubation centers to help young people with entrepreneurial ideas become entrepreneurs.  "Credits flowing from banks and financial institutions will be encouraged to be used for innovation," according to the budget.

The government's budget announcement, made in the Nepal Startup Fund and Startup Board National Startup Enterprise Policy-080, mentions it. The cabinet meeting on 080 Baisakh 20 approved the policy. Startup companies were also incorporated within the legislation by Ordinance 081, which amended certain Nepalese Acts pertaining to investment facilitation.

The registration and operation of a startup enterprise or business is mentioned in Section 4 'A' of the Industrial Business Act, 076, which comes after Section 4. The startup policy was then introduced. The Ministry has announced that the loan process has begun by authorizing the Startup Enterprise Loan Operation Procedure, 081, in accordance with the Appropriations Bill for the current fiscal year as well, since the procedure for the aforementioned policy has not yet been made.