To make the loan scheme for youths against academic certificates successful, a pragmatic approach is a must
While presenting the annual budget for the fiscal 2018-19 in the joint session of Parliament in May Finance Minister Yuba Raj Khatiwada outlined an employment generation scheme within the country so that Nepali youths may not need to seek job overseas. For this, the finance minister has allocated Rs 3.10 billion under the Prime Minister Employment Programme. The government is also planning to table the Employment Guarantee Bill in the House. In order to encourage youths with higher education to start their own businesses, arrangements will be made to provide a loan of up to Rs 700,000 with a five per cent subsidy in interest rate against their academic certificates as collateral. There will be compulsory provisioning of “credit guarantee” and “insurance” of such businesses. He also talked about establishing a Challenge Fund to provide start-up capital for businesses initiated by entrepreneurs with innovative knowledge, skill and capacity. In line with the budget speech the Finance Ministry is working on a guideline which will be submitted to the Cabinet for approval by mid-September. After the Cabinet approval, Nepal Rastra Bank will instruct banks and financial institutions (BFIs) to float loans to the target group as per the guideline.
The fiscal budget has envisaged providing loans with five per cent subsidy in interest rate to educated youths against their academic certificates as collateral to start their own businesses. The BFIs have, however, expressed doubts over its success, citing high chances of loan default and increased cost to manage the loan of such small amount. However, the budget has provisioned credit guarantee and insurance of such businesses to minimise the credit default. Finance Ministry officials have said the credit issued under this scheme will be guaranteed through Deposit Insurance and Credit Guarantee Corporation. The guideline has also strict provision of scrapping travel documents and voting rights if a borrower intentionally defaults on the loan. This provision is expected to discourage those who borrow loans but do not engage in any start-up businesses and do not pay back the principal and interest on time.
This scheme appears to be more systematic than the previous ones as strict riders have been attached to it. However, the Finance Ministry also needs to ensure that the soft loan will not be siphoned off to the people who are close to corridors of power. As past experiences have shown, people have a tendency of expecting a waiver of such loan from the government, especially during elections. In order to make this scheme fully functional, the government agencies must provide required skills and training to the youths on specific areas before they start the businesses they have identified. The government should also help them find secure markets where they can sell their produce at fair prices without the involvement of middlemen or intermediaries—a common problem that has discouraged people from taking up any businesses who really want to engage in the productive sectors. There must also be a provision of strong monitoring mechanism at the grassroots level to ensure that the youths do not misuse the money in unproductive sectors. The idea in itself is good, but a pragmatic approach is a must to make it successful.
Rabies vaccine crisis
Nepal is one of the countries where the burden of rabies is still high. Rabies, which occurs in more than 150 countries and territories, causes around 59,000 deaths globally every year. According to the World Health Organisation, one person dies of rabies every nine minutes. Though there is no exact data on rabies deaths in Nepal, rabies cases in the country have been on the rise, according to reports.
That the Sukraraj Tropical Infectious Disease Hospital, Teku, has been facing an acute shortage of Rabies Immune Globulin (RIG) vaccine for the last two weeks is something to worry about. The hospital administers the vaccine for free. When one of the largest hospitals in the country is facing the crisis of anti-rabies vaccines, one can easily imaging the situation at other health facilities. The authorities must work urgently to make such life-saving vaccines available at all health facilities at the earliest. People must not die of a disease like rabies which is 100 per cent preventable. Earlier reports suggested that there were some problems in procurement process. If this is the case, it must be sorted out.
A version of this article appears in print on September 03, 2018 of The Himalayan Times.