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🇳🇵 Nepal /Technology

Startups came, took loans and vanished. Now borrowing isn’t easy

From Kathmandu Post · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Nepal's government has disbursed approximately Rs1.88 billion in subsidized loans to nearly 1,500 startups over three fiscal years, with limited visible impact.
  • The startup loan program, introduced in 2018, has faced significant procedural and political delays, pushing disbursements close to the end of fiscal years.
  • For the upcoming fiscal year, the government plans to establish the Nepal Enterprise Facility to integrate startups and small businesses into the national economy.

Nepal's subsidized loan scheme for young entrepreneurs, initiated in 2018, has struggled to achieve its goals, with nearly 1,500 startups receiving around Rs1.88 billion over three fiscal years but showing little impact. A large majority of these startups reportedly fail within a year.

We had planned to disburse the loans by the end of May, but the election process and the formation of a new government delayed the programme. The executive director’s position at the Industrial Enterprise Development Institute (IEDI) is also vacant, which has contributed to the delay.

— Maniram GautamThe acting executive director of IEDI explains the reasons behind the delayed disbursement of startup loans.

The program's operationalization was delayed by five years due to procedural hurdles. In recent years, entrepreneurs have faced lengthy waits, sometimes exceeding a year, to access these loans. This year, political transitions and administrative delays have further postponed the disbursement process, with new government formations contributing to the setbacks.

Maniram Gautam, acting executive director of the Industrial Enterprise Development Institute (IEDI), stated that loan processing was pushed back by election activities and government changes. The vacant executive director position at IEDI also contributed to the delays. The institute aims to finalize selections by mid-June, intending to provide subsidized loans of up to Rs2 million to approximately 750 businesses out of 1,200 shortlisted enterprises.

The final selection will be completed by mid-June, after which the loans will be disbursed. Out of around 1,200 shortlisted enterprises, IEDI plans to select approximately 750 businesses for subsidised loans of up to Rs2 million.

— Maniram GautamGautam outlines the timeline and selection process for the current year's subsidized loans.

Looking ahead, Finance Minister Swarnim Wagle announced the creation of the Nepal Enterprise Facility in the upcoming fiscal year's budget. This platform aims to integrate startups, small, and medium-sized businesses into the national ecosystem, with an allocation of Rs500 million. The facility will focus on policy reforms, enhancing access to innovative financing, strengthening support networks, and promoting entrepreneurship nationwide.

We will p

— Swarnim WagleFinance Minister Swarnim Wagle discusses the upcoming Nepal Enterprise Facility.
DistantNews Editorial

Originally published by Kathmandu Post. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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