KATHMANDU, July 6: Youth and Small Entrepreneur Self Employment Fund (YSESEF) established by the government has been found involved in financial irregularities by providing credit worth over Rs 4 billion rampantly.
A task force formed to assess the effectiveness of credit mobilization by the YSESEF has unveiled the report showing the misappropriation of grant amounts in the name of empowering youth. The Ministry of Youth and Sports on May 14 formed a three-member panel led by Chartered Accountant Anil Poudel to study the functioning of the YSESEF.
The study carried out by the panel has pointed out the involvement of high ranking officials of the YSESEF in the financial irregularities. In addition, the subsidized credits disbursed by the fund were also found to be utilized in an ineffective manner.
Earlier, a field study conducted by the National Vigilance Centre in 2018 also unearthed several irregularities in the Youth Self Employment Programme launched in 2008.
The study had found that the YSESEF made excessive payments to institutions such as the Federation of Nepalese Chambers of Commerce and Industry, for providing orientation to aspiring entrepreneurs between 2008 and 2011, going against the decision of the YSESEF board. It also pointed out unlawful recruitments. There were instances of credit disbursement to people outside the target groups such as bullion traders, vehicle owners, wholesalers and even suppliers.
The fresh study shows that the YSESEF issued loans of Rs 4.50 billion through various cooperatives and development banks in four years starting from 2020. “However, it does not have proper records of how much loans were disbursed to which institutions,” reads the report.
The YSESEF issued loans of Rs 3.53 billion were provided to development banks and cooperatives. Of the amounts, it has failed to recover Rs 1.31 billion.
“The YSESEF has failed to abide by the credit investment and recovery guideline 2020. As the details of the credit amounts are not maintained properly, there is a least chance of the recovery of the loan amounts,” the report says.
The panel report also shows that most of the credits provided to the cooperatives have not been recovered so far. “Many cooperatives are found to have used the subsidized loans taken from the YSESEF to pay back the money to their depositors,” added the report.
The panel has also pointed out flaws in hiring manpower by the YSESEF. While a large number of human resources are hired on contract basis, multiple renewals of these staff were done breaching the law, the report says.