May 16: Most of the companies that submitted project proposals for the government-backed start-up enterprise loans have been kicked out in the first stage of selection. Officials say that out of 382 project proposals submitted to the government, 213 proposals have been rejected in the initial stage.

In order to create an environment for start-up enterprises and provide concessional loans, the Department of Industry called for submission of project proposals on March 30. Baburam Gautam, director general of the department, said that there were many proposals that did not meet the criteria under the 'Startup Business Loan Disbursement Procedure 2079'.

Gautam said that 213 proposals submitted to the Secretariat of the Startup Enterprise Implementation Committee have been invalidated from the initial stage.

“Now, more than half of those who submitted the proposals will not get concessional loan facilities,” added Gautam. He further said that the proposals were not selected because they could not submit all the documents as per the provisions of the procedure.

“They were among the companies and enterprises with sole investment and more than seven years old, which are not eligible to receive startup loans as per the procedure,” Gautam said.

The procedure has specified seven criteria for a start-up enterprise. According to the procedure, to get such a loan, the establishment or operation of the enterprise and business must not exceed seven years and should fulfill at least five criteria.

In the same way, there have been cases such as single business registered in the municipality, partnerships added after notification for startup loans was issued, consumer groups, names repeated in company registration, no partnership, no company registration, documents not disclosed. Among the 213 disqualified companies/enterprises, most of them were private firms with single investor and registered in the municipality as sole trading concern.

Gautam said that the proposals are being processed and the remaining 169 projects will be evaluated accordingly. According to him, this number may further decrease if it is found that the procedures and standards set by the government are not met during the evaluation and analysis of the proposals.

This is the first time that the government has asked for proposals to provide concessional loans to startups. The government plans to provide start-up enterprise loans to 100 people in the first phase. Gautam said that it will take some more time to disburse the loan as they still have lots of work to do regarding the proposals submitted.

The department has already announced to provide concessional loans for startup enterprises in 14 different sectors. As per the notice issued by the department, loans will be provided for start-up enterprises in the fields of agriculture and livestock, forestry (herbs, forest products), tourism promotion and entertainment and hospitality, science, technology, communication and information technology, human health services.

Similarly, concessional loans will also be provided to enterprises related to education and teaching learning, convenient and safe transportation services, infrastructure construction, automobiles, traditional technology related to improvement in the process of production and service delivery, mining and mineral research and development companies, projects related to food production and processing and waste management and environment.

The government will provide a maximum loan of Rs 2.5 million by keeping the project mortgage. It is mentioned in the procedure that the loan will be provided in two installments. The entrepreneur will get 50 percent of the first installment and the second installment only after six months.