Government implements start-up fund
Kathmandu, October 7
People who have been unable to execute their innovative ideas for business and technology development due to lack of access to capital have reasons to rejoice, as the government will soon extend loans and grants to the deserving candidates.
In a bid to promote entrepreneurship in the country, the government had announced a fund of Rs 500 million in fiscal budget 2015-16 and called on non-resident Nepalis, non-governmental organisations and the private sector to contribute to the fund.
Though the government had announced the programme in last fiscal year’s budget, the plan had been shelved owing to disputes between the Ministry of Industry and Ministry of Finance regarding supervision of the fund.
This year, the Ministry of Finance (MoF) has prepared the guidelines to bring the fund into implementation and the Cabinet approved it some two weeks back. “The fund came into implementation along with the Cabinet’s nod,” said Baikuntha Aryal, joint secretary and chief of the Budget Division under the Ministry of Finance.
The Startup Fund Guideline-2015 has said the board of directors will be chaired by finance secretary. It will comprise deputy governor of Nepal Rastra Bank, technology-related faculty heads of at least three universities, and a chartered accountant appointed by MoF as members and joint secretary of MoF as member-secretary to operate the fund. The guideline has said that representation of at least one woman from the universities is mandatory.
The proposal submitted by the aspirants will be evaluated by the sub-committee led by one of the members of the board and comprising two experts of the related field, a joint secretary of the related ministry and manager level-staff of the bank appointed by the board as member.
The guideline has extended authority to the board of directors to appoint the bank to extend loans to the selected candidates. The fund will sign an agreement with some select banks to extend the loan and the loan amount extended by the banks to the recommended candidate will be reimbursed by the fund. If the fund lacks the resources to reimburse the bank, it will compensate the variation in interest rate against the market rate to the bank till the fund has the required resources for reimbursement.
The board is authorised to set the higher and lower limit of the loan amount. The board also can monitor the projects run through its support and can even withdraw the loan or grant if the concerned parties fail to utilise the fund as proposed or generate promised results, as per the guideline. “The receivers of the loan or grant must submit the progress report of their projects to the fund on a quarterly basis.”
The secretariat of the fund will be at MoF and the ministry will arrange administrative expenses of the secretariat. The guideline has also provisioned that the fund’s money will not be frozen at the end of the fiscal year.
Such start-up funds have brought revolution in the sector of entrepreneurship development and the concept has been implemented in various countries in recent days. Eric Schmidt of Google, Phil Knight of Nike and Mark Zuckerberg of Facebook are some world-renowned names.