Gov’t Promises Grants, SoftLoans for Businesses Hit by Nepal Protests; Damage Assessment Underway
26th October 2025, Kathmandu
Finance Minister Rameshwor Khanal has made a significant announcement, assuring the private sector that the government will step in to compensate for property and business losses suffered during the Gen Z protests (Bhadra 23 and 24 / September 8 and 9) if those damages are not covered by existing insurance policies or the financial system.
Gov’t Promises Grants SoftLoans
The commitment was made while receiving the report, “Gen Z Movement: Roadmap for the Economy after Destruction,” prepared by the Nepal Association of Financial Journalists (NAFIJ) at an interaction program focused on the country’s economic recovery.
Details of the Compensation Mechanism
Minister Khanal outlined a tiered approach to addressing the losses, confirming the government’s role as the final safety net for affected businesses.
Market & Financial Coverage First
He noted that a portion of the recovery would be managed through existing market processes, insurance payouts, and current financial system support, including loan extensions and financing for reconstruction.
Government as the Last Resort
The core of the promise lies in filling the gap left by these systems. Minister Khanal stated: “We have been consistently stating that the government itself must make some arrangements for damages that are neither covered by insurance, banks, and financial systems, nor manageable through market processes.”
The government views this commitment as a crucial step toward restoring confidence in the economy.
Task Force and Recovery Plan
The Finance Minister confirmed that the official assessment of the total damage is currently underway.
Damage Assessment
The government is actively working through a Task Force to collect authoritative data on all assets that sustained a ‘loss’ or ‘damage.’
Form of Assistance
Once the Task Force report is complete, the government will determine the appropriate compensation method to aid businesses in re-establishing their lost assets. The support will be provided, “Whether it is in the form of grants or soft loans to re-establish the lost assets of businesses, we will do it.”
Timely Action
Crucially, Minister Khanal promised that the current interim government is committed to finalizing this support and completing the task within its own tenure.
Political Context and Policy Stability
Addressing the issue of long-term economic planning, Minister Khanal touched upon the limitations faced by the current interim government, whose primary mandate is to facilitate the upcoming elections.
Focus on Stability
The government’s immediate focus is on establishing a path toward policy stability.
Legal Constraints
Due to the electoral mandate, the Minister noted that it is “not politically easy for this government to issue ordinances for making laws on subjects other than those related to the election.”
Groundwork for Next Government
While new laws are constrained, the government will use procedural decisions where possible and, more significantly, will “prepare the groundwork and draft necessary laws to hand over to the next government.”
The NAFIJ Report and Economic Outlook
NAFIJ President Menuka Karki emphasized the severity of the economic setback caused by the protests.
The President highlighted that the economy, which was finally becoming ‘improvement-oriented’ after suffering major blows from the earthquake, the blockade, and the COVID-19 pandemic, has now been further damaged by the protest-related intrusion and destruction.
The recovery will require a significant expenditure of resources and effort.
The NAFIJ report, which incorporates the voices of fifteen business speakers, including those from commercial hubs such as Pokhara, Birgunj, and Biratnagar, is expected to serve as a valuable resource for government policymakers and researchers seeking to understand the full impact of the Gen Z movement.
For more: Gov’t Promises Grants SoftLoans
