Government Offers Startups Loans up to NPR 25 Lakhs at 3% Interest Project as Collateral

Government Offers Startups Loans
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20 August 2024, Kathmandu

The Ministry of Industry, Commerce, and Supply has recently approved and implemented the “Startup Enterprise Loan Operation Procedure, 2081,” a landmark initiative aimed at fostering innovation and entrepreneurship in Nepal.

Government Offers Startups Loans 

The procedure, approved on August 14, simplifies the process of obtaining subsidized loans, providing a significant boost to entrepreneurs with fresh ideas and innovative capabilities.

Under this new scheme, startups can access loans of up to NPR 25 lakhs at an exceptionally low interest rate of 3%, with the project itself serving as collateral. The Industrial Business Development Foundation, the body responsible for executing the startup loan program, will soon issue a public notice calling for proposals from eligible entrepreneurs.

To qualify for the loan, businesses must meet specific criteria: the enterprise must have been registered for less than ten years, should not have generated an annual turnover exceeding NPR 150 million in any fiscal year, and must demonstrate strong potential for rapid growth driven by innovative thinking. Additionally, businesses that import goods and services, are blacklisted, or are registered as holding and investment companies are not eligible for this loan.

The loan comes with a maximum repayment period of five years. Entrepreneurs must deposit the loan amount into a designated bank account, with any unused funds being returned to the Federal Reserve Fund at the end of the fiscal year. Entrepreneurs are also required to self-declare that they have not received concessional loans from other agencies, as double financing is prohibited under this procedure.

The loan disbursement process is structured in installments: loans up to NPR 5 lakhs are released in one installment, loans up to NPR 15 lakhs in two installments, and loans up to NPR 25 lakhs in three installments. Banks are required to provide the first installment within seven working days of the agreement and subsequent installments based on verified progress in the startup enterprise.

This initiative represents a significant step forward in supporting Nepal’s burgeoning startup ecosystem, offering financial assistance to innovative entrepreneurs and promoting sustainable economic growth.

Government Offers Startups Loans 


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