KOICA to Provide USD 2.5 Million in Interest Subsidy for Returning Nepali Migrant Workers
26th November 2025, Kathmandu
The Korea International Cooperation Agency (KOICA) and Agricultural Development Bank Limited (ADBL) have formalized an agreement to launch the Financial Access Enhancement Program for Returning Migrant Workers from Korea.
KOICA Provides Interest Subsidy
This significant initiative is designed to support the sustainable reintegration of Nepali workers returning from the Republic of Korea by providing them with crucial subsidized financial support to start their own enterprises in Nepal.
Program Objectives and Financial Structure
The initiative is a component of a larger bilateral project, “Strengthening a Step-by-Step Support System for the Sustainable Reintegration of Returning Migrant Workers from Korea,” which was agreed upon by the Governments of Nepal and the Republic of Korea on September 23, 2022.
Primary Goal: The core objective is to improve financial access for Nepali workers returning from Korea and enable them to successfully establish enterprises within Nepal. This capitalizes on the skills, discipline, and savings acquired through the Employment Permit System (EPS).
KOICA’s Contribution (Interest Subsidy): KOICA will provide USD 2.5 million (approximately NPR 320 million). This entire amount is dedicated solely to covering the interest subsidy on the loans provided by ADBL. This is the mechanism that lowers the effective borrowing cost for the eligible returnees.
ADBL’s Contribution (Loan Fund): ADBL, the implementing financial partner, will contribute the main loan capital, totaling NPR 1.2 billion, to be disbursed as loans to the beneficiaries.
Subsidy Term: The interest on the loans will be subsidized by KOICA for a period of up to five years.
Targeted Impact and Expected Outcomes
The program is structured to have a tangible impact on the lives of the returning migrant workers and the local economy by promoting entrepreneurship and job creation.
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Duration of Program: The initiative will run for three years, from 2026 to 2028.
Beneficiaries and Loan Size: The program is estimated to support 200 to 250 Korea returnees. Each eligible entrepreneur is expected to receive a substantial average loan amount of around NPR 5 million.
Economic Impact: The overarching aim is to encourage returning youth to utilize the technical skills, professionalism, and capital they acquired while working in Korea to launch productive ventures in Nepal. This shift from foreign employment to local entrepreneurship is expected to generate local employment and contribute directly to Nepal’s overall economic development.
Formal Agreement and Institutional Roles
The formal agreement for the “Financial Access Enhancement Program” was signed by key officials from the partnering institutions and witnessed by high-level government representatives.
Signatories: The agreement was officially signed by Muhon Kang, KOICA Country Director, and Govinda Gurung, CEO of Agricultural Development Bank Limited (ADBL).
Witnesses: The signing was witnessed by Dhaniram Sharma, Joint Secretary of the Ministry of Finance, and Krishna Prasad Sapkota, Joint Secretary of the Ministry of Labour, Employment and Social Security (MoLESS), signifying the Government of Nepal’s oversight and endorsement.
Statements of Support: During the ceremony, representatives praised the contributions of Nepali workers abroad and underscored the mutual commitment to their dignified reintegration. Joint Secretary Sapkota specifically highlighted the positive impact of the Employment Permit System (EPS) in benefiting thousands of Nepali youths, while Joint Secretary Sharma recognized KOICA as a reliable and effective long-term partner in Nepal’s development. ADBL CEO Gurung expressed his confidence in the program’s impactful and timely implementation.
The program is a crucial step in transforming remittances and foreign work experience into sustained local capital and job creation, representing a strategic utilization of foreign aid to support key national development priorities.
For More: KOICA Provides Interest Subsidy
