The startups selected for subsidised loans are expected to be able to borrow starting in March next year.

Biswo Nath Ghimire, information officer at the Industrial Enterprise Development Institute (IEDI), the agency overseeing the startup promotion scheme, said that in August, they invited proposals from startups.

“We received 5,158 applications through online and offline mediums,” said Ghimire.

The evaluation committee is reviewing it. IEDI will publish shortlists of applicants and enterprises by mid-January.

The government has allocated a budget of Rs1 billion to support startup growth for the current fiscal year.

According to the institute, the shortlisted applicants must present their business proposal to the evaluation committee of the IEDI. The committee will then request a credit appraisal from the bank.

Ghimire said the final list of applicants will be published by the end of February, and loans will be issued subsequently.

Ghimire said the evaluation committee comprises government officials, the private sector, and consultants.

The Rastriya Banjiya Bank has agreed to disburse the loan to startup entrepreneurs.

According to Startup Enterprise Credit Operation Work Procedure 2024, the prospective startups will get loans of up to Rs2.5 million at 3 percent annual interest.

IEDI recommended 183 startup enterprises for subsidised loans in the last fiscal year.

However, 165 received a loan of Rs190.40 million, said Ghimire.

The institute received 1,658 applications for subsidised loans in the last fiscal year. Most of the loans were given to agro-business startup enterprises.

In the last fiscal year, the government allocated a budget of Rs250 million for the programme.

The IEDI has been monitoring the startup enterprises that received loans in the last fiscal year.

The bank has also been conducting monitoring.

The institute said the startups that took subsidised loans have started repaying.

The work procedure provisions state that the entrepreneurs taking loans under the subsidised scheme should use the amount per their objectives, pay back the loan and interest, and provide necessary information and statistics during an inspection conducted by the governing bodies or banks.

The startup enterprise should submit the progress report to the banks every quarter.

According to the working procedure, if the startup fails to repay the loan on time, the bank will recommend the action the relevant authority can take.

Also, startup accounts in banks and financial institutions will be suspended if they fail to repay the loan by the agreed time.

Banks can take a service charge of 0.1 percent from an entrepreneur’s maximum loan amount.

According to the work procedure, banks will provide loans up to Rs500,000, which startups should repay in a single instalment. Similarly, loans up to Rs1.5 million can be cleared in two instalments, and loans up to Rs2.5 can be paid back in three.

In May, the Cabinet approved the National Startup Enterprise Policy 2024. The policy mentions attracting foreign direct investment and non-resident Nepali investors to promote startup enterprises and amend the related law to facilitate the entry of enterprises into the capital market.

The policy says that creation of the ‘Nepal Startup Fund’ will support startup entrepreneurs financially.

The Nepal Startup Council has also provided funds for the promotion and development of startup enterprises, to solve the problem in startup enterprise operations, to establish the concept of startups as new entrepreneurs, and for necessary coordination and facilitation.

The council has representatives from the Ministry of Industry, Commerce and Supplies, the National Planning Commission, the Nepal Rastra Bank, the finance ministry, and the agriculture ministry, among other ministries and the private sector.

The startup policy, formulated under the Industrial Enterprise Act 2020, was expected to be implemented last fiscal year.