September 6: The government has presented a proposal to the cabinet for amending the work procedure to provide 2 percent concessional loan to start-ups.

The National Planning Commission has submitted a proposal to the Council of Ministers after changing provision of grants into loans.

According to the commission, a decision will be taken soon since the proposal has been taken to the Council of Ministers through the Ministry of Finance. A total of 699 proposals for seed money will be finalized after decision.

People, who were interested in the latest works of information technology, agriculture, energy, health, tourism, and industry had applied for the loan in mid-May.

The call for proposals was open from May 11 to June 9. In case of loans for startup businesses, the amended work procedure allows a maximum loan of 50 percent of the required capital, which can range from Rs 1 million to Rs 10 million. An individual or a firm were not allowed to submit a proposal for multiple loans.

A person or a firm can get a maximum loan of Rs 5 million at 2 percent interest rate if they wish to undertake a venture of Rs 10 million.

The proposal needs to have clear information about the business plan along with the status of the self-investment of the entrepreneur, the amount they have demanded from the Government of Nepal and any of their other investment partnerships. The commission hasn’t accepted any further applications because of the lockdown.

The commission said that 15 days will be given to submit the proposals after the Council of Ministers pass the work procedure. The government had initially envisioned a ‘Challenge Fund’ to provide grant up to 50 percent of the capital requirement in order to encourage young entrepreneurs to start new businesses. Although the government had announced such provision during the budget of last fiscal year, the program could not be implemented. The government has given continuity to the program by changing the modality into concessional loan in this year’s budget instead of grant.

The revised work procedure has been made by including the advices from the ministries of finance, industry and education. Dr Ram Kumar Phuyal, a member of the National Planning Commission, says that a high-level committee will recommend the loans to those who meet the criteria as stated in the amended work procedure.

The committee will have the right to select and recommend the entrepreneurs, whom they think will develop high-quality inventions and systems is less time, cost and resources. According to Phuyal, the committee will also be responsible to check if the loans are being used in the right way. The committee will also be responsible for the monitoring of entrepreneurs, businessmen or institutions that have received the loan. A steering committee has been formed under the coordination of a member appointed by the National Planning Commission for the provision of loans. The committee will also have a joint secretary each from the ministries of finance; industry, commerce and supplies; and education as its members.

A representative of banks has also been included in the committee for the selection of recipients of the loan. An official from the commission said that a representative of banks was not selected previously as the work procedure was earlier concerned with grants.