Biratnagar, September 17
Entrepreneurs selected under the Koshi provincial government’s ‘Startup Enterprise Seed Capital Mobilization Programme’, introduced last fiscal year to encourage new businesses, have not received the promised seed capital.
A total of 32 entrepreneurs selected for the programme were denied the seed capital due to errors in the procedures prepared by the government.
The Ministry of Industry, Agriculture and Cooperatives had selected 32 enterprises for the programme. However, as the ministry failed to provide the seed capital, the entrepreneurs have faced both financial and mental distress.
The ministry had issued a 21-day notice on Chaitra 25, 2082 BS seeking applications for the startup seed capital programme. Based on the applications received, 32 enterprises were selected on Jestha 21.
Under the programme, each enterprise was to receive up to Rs 1 million in seed capital depending on the nature of its project. The provincial government had allocated Rs 10 million for the programme last fiscal year.
The ministry had prepared the ‘Startup Enterprise Seed Capital Mobilization Procedure, 2082’ to distribute the funds. It had planned to provide the seed capital through government-owned banks, with the government itself standing as guarantor.
However, the ministry did not coordinate with government-owned banks while preparing the procedure. The banks were therefore not prepared to implement the programme.
After the programme was halted, entrepreneurs who reached the ministry in Jestha to sign agreements were forced to return disappointed. As the allocated budget has already been frozen without being spent, there is little possibility that they will receive the seed capital from last fiscal year.
Despite this, the selected entrepreneurs continue to visit the ministry.
“We were selected and called to sign the agreement, but we did not receive the seed capital,” said one of the selected entrepreneurs. “It felt as if we had been cheated by the government itself.”
Prakash Marasini, spokesperson for the Ministry of Industry, Agriculture and Cooperatives, acknowledged that the programme could not be implemented due to procedural errors. He said discussions were underway to include the affected entrepreneurs from last fiscal year in the programme for the current fiscal year, as the previous budget had already been frozen.
The ministry has allocated Rs 20 million for the startup seed capital programme in the current fiscal year.
According to the procedure, entrepreneurs receiving the seed capital would have to repay it within two to five years, with the government guaranteeing the bank guarantee.
However, the entrepreneurs were affected because the programme was introduced without adequate preparation.
Chandrabahadur Karki, an officer at the Industry and Cooperative Development Division, said preparations were underway to amend the procedure after holding necessary discussions with banks. He said the process would be made easier this time after coordination with banks was not carried out previously.
According to Karki, entrepreneurs who were selected for seed capital but did not receive it are being considered for priority when a new call for applications is issued.
The ‘Udaya Project’ is also being implemented in Koshi Province with support from the Swiss government. Under the project, loans are provided to entrepreneurs with the provincial government standing as guarantor.
The Koshi provincial government has selected Rastriya Banijya Bank and Global IME Bank for investment under the project.
Small and medium-sized young entrepreneurs can obtain concessional loans ranging from Rs 3 million to Rs 30 million from these banks.
