Govt allocates Rs 860 million for startup loans at 3pc interest

KATHMANDU: In a significant push to promote entrepreneurship, innovation, and Nepal’s growing startup ecosystem, the Government of Nepal has allocated NPR 860 million (86 crore) under the Startup Enterprise Loan Program for the current fiscal year 2082/83 (2025/26 AD). The initiative aims to provide concessional loans at just 3% interest rate to support youth-led businesses and technology-driven ventures.

The program, implemented by the Ministry of Industry, Commerce and Supplies, offers collateral-free loans ranging from NPR 500,000 to NPR 2 million per entrepreneur. Although the upper limit has been reduced from NPR 2.5 million last year, officials report a notable surge in interest among aspiring entrepreneurs across the country.

Surge in Applications Across Nepal

Following a nationwide call for proposals issued on Kartik 19, 2082 (November 5, 2025 AD) by the Industrial Enterprise Development Institute, the program received an overwhelming 10,244 applications. Among them, 2,041 were submitted physically while 8,203 applications were filed online, reflecting growing digital adoption in Nepal’s startup ecosystem.

Applications were received from all 77 districts and 713 local levels, indicating broad national participation and rising interest in entrepreneurship, particularly among youth and small business innovators.

AI-Based Screening and Multi-Layer Evaluation

The evaluation process has adopted a multi-tier approach, incorporating modern digital tools. Notably, the initial screening is being conducted using an Artificial Intelligence (AI)-based system, which the ministry claims ensures up to 80% accuracy in filtering viable proposals.

Shortlisted projects are undergoing detailed assessment by expert committees. Additionally, field verification has been conducted through local enterprise development facilitators, who have submitted reports including on-site photos and short video documentation to validate project feasibility and operational status.

Pitching Removed to Reduce Burden

In a key policy shift, the government has eliminated the pitching (presentation) requirement this year. Officials stated that pitching imposed unnecessary financial and logistical burdens on applicants. Instead, projects will now be evaluated based on documentation, field reports, and predefined criteria under the program guidelines.

Credit Screening and Selection Criteria

A preliminary shortlist will be published soon. Selected applicants will then undergo credit evaluation through banks, and only those scoring above 50 points will be prioritized for loan recommendations.

The government aims to support 400 entrepreneurs this fiscal year, compared to 600 beneficiaries in FY 2081/82 (2024/25 AD) and 165 in FY 2080/81 (2023/24 AD). So far, a total of 765 entrepreneurs have benefited from the startup loan scheme since its inception.

Eligibility Criteria for Startup Loans

To qualify for the program, applicants must meet specific criteria:

• Business must be registered as a private firm, partnership, company, or cooperative
• Must be based on innovation, creativity, and technology use
• Enterprise age must be less than 10 years
• Annual turnover must be below NPR 150 million (15 crore)
• Artificial splitting or merging of existing businesses is strictly prohibited

Applicants are also required to submit complete documentation along with the prescribed project proposal format.

Government’s Strategic Push for Startup Economy

Ministry spokesperson Netra Prasad Subedi confirmed that the initial shortlist will be published soon, expressing confidence that the program will drive job creation, innovation, and economic dynamism in Nepal.

With Nepal increasingly focusing on startup-friendly policies, digital economy growth, SME financing, and youth entrepreneurship, this concessional loan program is being positioned as a key instrument to stimulate economic recovery, investment opportunities, and private sector confidence.