Loan up to 25 Lakhs at 3 Percent Interest Rate to Startups with Project Collateral The Ministry of Industry, Commerce and Supply has approved the Startup Enterprise Loan Operation Procedure, 2080. Minister Ramesh Rizal has recently approved the start-up procedure for disbursing loans of up to 25 lakh rupees as project collateral.
Only three percent annual interest will be charged on such loans, which will be provided through the National Commercial Bank. 25 crore rupees have been allocated for the start-up enterprise and loan program announced through the budget of the current financial year 2080/81. This amount will be provided to the lending bank.
Under this program implemented by the Industrial Business Development Foundation, startups receiving loans must use the loan amount according to the purpose.
The bank will provide loans up to 5 lakhs in one installment, loans up to 15 lakhs in two installments, and more than 25 lakhs in three installments. While disbursing loans in this way, startups will have to get business or project insurance. The term of such a loan will be for a maximum of five years and the repayment of principal and interest will have to start from the second year.
In case of non-payment of the loan received in this way, the bank can recommend to the relevant body for action. The ministry said that a startup policy has also been formulated to promote startups and is in the process of approval. “In addition to this, the process of amending the Industrial Business Act, 2076 has also been initiated to provide legal arrangements to support and promote startups,” the ministry said.
What startups get startup loans?
The procedure is defined as a start-up enterprise in which there is a possibility of upgrading the production operation or distribution process of a product or service by using new technology and creative thinking. According to the law, startups that have been registered for less than seven years will be eligible for such loans.
Similarly, startups with total paid-up capital ranging from two lakh rupees to ten lakh rupees, annual turnover not exceeding two crore rupees and fixed capital (excluding the value of real estate) not exceeding two crore rupees can participate in this program.
The procedure has included enterprises from 16 different sectors within the startup enterprise.
- Related to agriculture and livestock.
- Related to forest production.
- Related to tourism promotion and entertainment and hospitality.
- Related to science, technology, information, and communication.
- Related to human health services.
- Related to education and teaching learning.
- Related to easy and safe transportation and transportation services.
- Related to automobiles.
- Related to traditional technology, product and service delivery process improvement.
- Related to mining and mineral research and development.
- Relating to household or daily living.
- Related to food production and processing.
- Related to waste management and environmental protection.
- Related to disaster management.
- Related to alternative and renewable energy.
- Related to climate change mitigation.
This is how the loan will be distributed
According to this procedure, the Industrial Business Development Foundation will publish a public notice in the national level daily newspapers and electronic media to submit project proposals to the entrepreneurs willing to take loans within 21 days. In addition to this, according to the need, proposals can be requested on a provincial basis and an initial selection of proposals can be made at the provincial headquarters.
In this way, after the notice is published, startups who want to take a loan must submit their project proposal in the format given in Schedule 1 of the procedure and self-declaration that the details and attached documents mentioned in the proposal are correct.
The foundation will form an evaluation committee that includes experts who have worked in the field of startups and entrepreneurship, as well as loan disbursing banks. Who will evaluate the proposals and prepare a list of eligible proposals? After that, the listed bidders will be asked to present a commercial proposal and the startup will be selected for the loan.