March 22: Start-up enterprises will now get collateral-free concessional loans up to Rs 2.5 million. 

The Ministry of Industry, Commerce and Supplies has prepared and approved the start-up loan procedure to provide loan facilities at subsidized interest rate without collateral to 14 types of enterprises.

According to the procedure, the enterprises designated to get concessional loans under start-up should not be operating for more than seven years. It is mentioned in the procedure that concessional loans can be granted to those enterprises that meet at least five of the seven criteria set by the government, including the paid-up capital not exceeding Rs 50 million, the total income of the business not exceeding Rs 50 million a year, the fixed capital not exceeding Rs 20 million, and the enterprise not having more than 10 full-time employees.

The government has allocated a budget of Rs 250 million in the current fiscal year for the disbursement of start-up loans. After the implementation of the procedure, the start-up enterprises that meet the standards set by the government will get a loan of Rs 2.5 million without collateral from the commercial banks for 7 years at an annual interest rate of 3 per cent.

Joint Secretary Baburam Gautam, head of the Industrial Division under the Ministry of Industry, Commerce and Supplies said that the start-up loan procedure has been sent to the related agencies for implementation. 

"The Ministry of Industry has approved the start-up loan procedure and sent it to the Department of Industry for implementation," Division Head Gautam told New Business Age on Tuesday, "The start-up policy has been sent to the Ministry of Finance and the National Planning Commission for consultation."

According to Joint Secretary Gautam, eligible start-ups can now apply for concessional loans. "We will evaluate their application and provide loans as soon as possible," he said.

The start-up enterprise credit fund procedure 2079 is about to be implemented for the first time in Nepal.

Industrialists are happy after the government introduced this kind of arrangement. 

Ranjit Acharya, coordinator of the Start-Up Innovation Committee under the Federation of Nepal Chamber of Commerce and Industry, said that everything possible to encourage and support start-up enterprises is included in the start-up policy.

He said, "The start-up policy will make the current ecosystem sustainable and innovative." Even though this arrangement is already in place, it has been delayed because the officials of the ministry took a long time to understand the start-up issue.”

Acharya also expressed his apprehension that the start-up process may become a victim of political conflict.