The Ministry of Federal Affairs and General Administration has sent a letter to municipalities asking them to conduct on-site inspections of project proposals under the Startup Enterprise Loan Program. The Industrial Business Development Foundation says that it is necessary to check the physical condition of the project during the evaluation process of proposals received for the startup loan.

The government has allocated a budget of Rs 730 million to disburse startup loans for the current fiscal year. The foundation had issued a 21-day notice on 19 Kartik and called for project proposals for startup enterprise loans. In that, 10,244 entrepreneurs have submitted project proposals. Umesh Gupta, executive director and engineer of the foundation, said that 2,041 entrepreneurs have registered their project proposals at the foundation. ‘8,203 people have registered their proposals online,’ he said. 

This is the third time that the foundation is disbursing startup enterprise loans. Gupta said that some project proposers were found to have brought fake videos while disbursing loans in the last two fiscal years, so this time they have been asked to conduct an on-site inspection. 

‘We used to call the proposers here, but we found that some of them had brought fake or other videos. Therefore, we are going to conduct an on-site inspection with the help of the enterprise development facilitators working in the municipality,’ Gupta said. ‘These facilitators are under the Ministry of Industries. We have created a separate website. There, they send photos and a one-minute video. That will make it easier to evaluate.' But since not all municipalities have facilitators, the proposer can be called to Kathmandu for the presentation of the project, as before, Gupta said.

Entrepreneurs who are registered as private firms, partnership firms, companies or cooperatives with the relevant industry registration bodies, have high growth potential through transformation into an enterprise business by using innovative and creative thinking and technology in the production of goods or services, have adopted technology, have not exceeded 10 years since the enterprise business was registered, have not exceeded Rs 150 million in any financial year after registration, and have started a new enterprise business without merging or splitting the existing enterprise business will be eligible for startup loans. Based on this, the initial list will be made public from the received project proposals. The foundation has stated that it will be made public only after the upcoming elections as it is still in the process of evaluation.

Loans will be given in the areas related to agriculture and livestock, forest products, tourism promotion and entertainment and hospitality, science, technology, information and communication, human health services, education and teaching and learning, automobiles, traditional technology, process improvement of production and service delivery, household or daily living, food production and processing, easy and safe transportation and transit services, mining and mineral research and development. The foundation had earlier been distributing loans to entrepreneurs from a minimum of 500,000 to a maximum of 2.5 million rupees. However, this year, due to the low budget, it has said that loans will be distributed from a minimum of 500,000 to a maximum of 2 million rupees.

Earlier, the proposal that received the highest score among the proposals that received more than 50 percent of the points received after credit appraisal by the bank was prioritized and recommended for loans. The evaluation committee formed by the foundation will evaluate the proposal based on the presentation of the proposed project and the photos, videos, financial statements and other details of the proposer's business and the questions and answers of the evaluation committee. But since the number of loan proposals has increased every year, this time, on-site testing has also been started, said Gupta.

The total score will be calculated by adding the average score of the evaluation committee of the proposers who attended the presentation and the score obtained from the credit appraisal by the bank. The evaluation committee will prioritize the proposal that receives the highest score from among the proposals that receive at least 50 percent of the points and submit the loan recommendation list to the executive director of the foundation for approval.

In the last fiscal year 2081/82, the government allocated Rs 1 billion for startup loan disbursement, but it disbursed Rs 886.625 thousand in loans. While the administrative expenses of the foundation amounted to 3 percent from the allocated budget, 25 percent was kept in the deposit and loan security fund for loan security (insurance).

The foundation disbursed Rs 886.625 thousand in startup loans to 600 people in the last fiscal year. The foundation had called for project proposals for loan disbursement on 11 Bhadra 2081. At that time, 5,158 entrepreneurs had registered their proposals by attending online and physically. Of these, 1,314 entrepreneurs were selected for project presentations on December 19. Of those selected, 1,073 entrepreneurs presented their projects from the last week of December to the second week of Chait.