KATHMANDU, Dec 3: The government has introduced the innovative start-up capital credit flow procedure, 2077 BS to extend start-up capital for innovative enterprises and business operations. Enterprises having latest knowledge, skills and abilities to operate their ventures can get upto Rs 5 million loans for 2 percent interest rate.
According to the procedure proposed by the Ministry of Finance and later approved by the cabinet, there will be a directors committee coordinated by the Vice Chairman of the National Planning Commission to manage loan flow.
The committee will call for proposals to provide loans to small and medium sized enterprises and entrepreneurs who have not been able to raise the required investment capital in the fields of industry, agriculture, energy, health, tourism, education and information technology.
Similarly, the committee will prepare criteria for the selection of proposals, ceiling of loan amount, installment, number of proposals to be selected for providing loan and monitor whether the inventor, entrepreneur or businessman receiving the loan has used it properly or not.
According to the procedure, an entrepreneur, who wants to get a loan should mention in the proposal the innovative idea, venture or business, its risk, possible return, required amount, loan amount expected from the government and its impact on the socio-economic sector.
For the selection of proposals, there will be a proposal evaluation sub-committee with a member coordinator representing the Ministry of Industry, Commerce and Supplies. The amount allocated by the Government to the ministry for the selected innovators or entrepreneurs will be provided as loan at the interest rate of 2 percent through the commercial bank specified by the Committee.
The working procedure also stipulates that a maximum amount of Rs 5 million will be provided as new innovative starting capital so as not to exceed 50 percent of the total cost on the basis of the proposed investment and its impact.
While approving the loan, the bank can take the business action plan, agreement and project of the entrepreneur as loan collateral. According to the ministry, the entire installment and interest of the loan along with the principal amount should be repaid within four years of the commencement of the repayment period.
Chief of the Economic Policy Analysis Division at the Ministry of Finance Yamlal Bhusal said the implementation of this procedure would go a long way in reviving the economy that had been weakened by the COVID-19 pandemic.
The procedure also states that if any loan or grant amount is received from the government for the establishment or operation of an innovative venture, enterprise or business, similar proposals will not be selected. With this, the Innovative Startup Capital Grant Procedure approved by the Council of Ministers on February 3, 2020 has been repealed.