Monday, 25 January, 2021

Financial Support To Young Entrepreneurs

There is no denying the fact that the number of unemployed youths in Nepal has gone up at an alarming rate as the COVID-19 pandemic has paralysed the entire economic sector. The manufacturing and trade sector has suffered a huge setback while the tourism industry has remained almost closed for the past 10 plus months. The contagion has also hit the foreign employment. As a result, the remittance being received by the country has decreased considerably over the months. Many creative youths have now started showing their interest in running their own enterprises for self-employment. But it is not easy for them to have some seed money to start their businesses. Against this backdrop, the Youth and Small Entrepreneur Self-Employment Fund (YSEF) is planning to increase per-entrepreneur financial support to Rs. 500,000. In the past, YSEF used to provide Rs. 200,000 to each of the potential entrepreneurs.

This is a whopping 150 per cent rise in the financial assistance. Interested candidates can apply to the cooperatives for the financial support and the Fund conducts entrepreneurship training for the selected ones. As per a news report carried by this daily on Monday, the agenda to increase the amount is going to be endorsed by the YSEF board meeting soon. Actually, the Fund was considering increasing the size of the assistance for the past couple of years as suggested by entrepreneurs and other stakeholders. Anyway, the YSEF is now coming up with the new provision that will come into effect following its ratification from the cabinet. The Fund is now chaired by the Minister for Youth and Sports. Over the last 12 years, the YSEF has been providing young entrepreneurs with Rs. 200,000 as a concessional loan through the local cooperatives. They have been receiving this loan without collateral.

The increment in the loan amount is now justifiable because the cost of setting up a business and its operation has gone up remarkably. The purse of Rs. 200,000 is not adequate even to open a small outlet or showroom. The YSEF is also in the process of revising its by-laws to expand its investments and incorporate more young entrepreneurs in the entrepreneurship development campaign. The Fund supports youths through over 2000 banks and financial institutions and cooperatives. Till date, the YSEF has mobilised some Rs. 9.63 billion to 73,668 entrepreneurs in 75 districts. As many as 34,309 women self-entrepreneurs have been created by the Fund as of mid-June last year. The programme, however, has yet to be launched in Mustang and Manang districts.

Of the total amount of loans disbursed, the Fund has recovered Rs. 6.02 billion. Some 60 per cent of the loan has been invested in vegetable farming, livestock farming, fisheries and poultry farming. Although the respective banks, financial institutions and cooperatives fix the interest rate of this concessional loan, the Fund provides 60 per cent subsidy in the interest to the beneficiaries. Thus, the programme has become very popular among the targeted group. The Fund is now waiting for the endorsement of the new bylaws to expand investment. That more than 100 wholesale lenders’ files have been pending shows that the programme has been gaining ground gradually. The YSEF needs to focus on recovery of the loan and strictly monitor its utilisation to ensure that the taxpayers’ money is used properly. 

How do you feel after reading this news?