Notice regarding loan concessions for Start-Up Enterprises by the Government of Nepal

In accordance with the Start-Up Enterprise Loan Fund Procedure, 2079 (the “Procedure”), the Government of Nepal has issued a notice for all interested start-up enterprises regarding eligibility of applying for loan concessions dated 26 March 2023 (2079/12/16) (the “Notice”). The validity of this publication is for 21 days from the date of publication of the notice (starting from 26 March 2023), in the given timeframe, interested start-up enterprises must submit their project proposals in accordance with the given format. The following sections will provide extra clarity regarding this notice.

1. What are the start-up industries that are eligible to apply for concessional loans?

Following are the list of startup industries who can apply for concessional loan,

a. Agriculture and poultry based,

b. Forest (herbs, forestry products) based,

c. Tourism promotion, entertainment and hospitality related,

d. Science, technology, information, and communications technology based,

e. Human health services related,

f. Education and educational institutions related,

g. Related to accessible and safe travel and transportation,

h. Infrastructure construction related,

i. Automobile related,

j. Sectors dedicated to improving processes related to traditional technology, production methods and services,

k. Mines and mining research and development related,

l. Aiding domestic and daily affairs to become easy, convenient, safe,

m. Production and processing of edibles based,

n. Waste management and environment related.

2. What are the criteria that must be satisfied by start-ups to apply for business and enterprise loans?

Start-up entrepreneur which falls under following criteria can apply for the startup business and enterprise loans,

2.1 Registered and in operation, but for not more than 7 years before the publication of this notice, and

2.2 Fulfil at least 3 of the following criteria from (a) – (d), and 2 of the following criteria from (e) – (g):

a. Paid up Capital: Paid up capital of not more than NRs 5 million (NRs 50 lakhs),

b. Gross Income: Gross income of the enterprise not more than NRs 5 million (NRs 50 lakhs),

c. Fixed Capital: Fixed capital (except land and building) of not more than NRs 20 million (NRs 2 crore),

d. Employees: Not more than 10 full time employees,

e. Use of Information Technology: Utilisation of technology and innovation (creative thinking) in resolving consumer issues in production and distribution of goods and services,

f. Allocation of Expenditure: Expenditure allocation of at least 5% of total expenditure for product development, market research & development,

g. Intellectual Property Protection: Either registered intellectual property of industry as patent or design or software or eligible to be registered as patent, design or software.

3. What businesses and enterprises are not eligible to apply for the start-up loan?

The procedure as well as notice has highlighted on the list of enterprises which cannot apply for the business and enterprise loans,

a. Registration Requirement: One which is not legally registered in Nepal,

b. Trading: Not utilising technology and innovation and simply importing goods and services from foreign countries,

c. Identity of the Company: A company working as a subsidiary company or firm of an existing company or business,

d. Blacklist: A business or a person that is blacklisted in the Credit Information Bureau,

e. Tax Registration: Not obtained PAN (Permanent Account Number) for tax purposes,

f. Medium and Large Holding Company: A business classified as medium and large holding company as per Industry Enterprises Act (IEA) 2076,

g. General Prohibition: Banned by existing laws for other reasons,

h.  Single shareholding company.

4. What are the maximum loan limit and collateral security for concessional loans that are applicable for start-ups?

The maximum limit of loan is NRs 2.5 million (25 lakhs) and project shall be considered as collateral security.

5. How can a project proposal be submitted?

Proposal can be submitted as per Schedule 1 to Department of Industry (DOI) or online at All related/required documents for the proposal must be submitted as a single scanned PDF file. One enterprise/business group cannot submit for more than one proposal.

6. What documents are required to be submitted with the proposal?

Following are the list of documents to be submitted along with the proposal,

a. A photocopy of certificate of registration of the firm/company or industry,

b. A photocopy of the PAN,

c. A photocopy of tax clearance certificate for last fiscal year,

d. A photocopy of citizenship certificate of the authorised representative of firm/company or industry.

The notice also provides that any proposals containing inaccurate or falsified self-certified/disclosed documents and details will be disqualified. Such persons will remain disqualified for future purposes.

7. What are details to be Disclosed for a loan application?

The prescribed format of an application has been provided in the Annexure I of this document. The brief detail of the information to be disclosed are as follows, (a) name of the company, (b) address of the company, (c) date of registration, (d) registration number, (e) PAN Details, (f) license Number, (g) license Validity Date, (h) Main Address of the Company including Province, District, ward no. , tole, (i) telephone number, (j)e-mail, (k) name of authorised representative, designation, number and e-mail Id, (l) name of director, citizenship number, district of issue, date of issue, (m) permanent and current address, (n) main business / head office address, province, district, ward number and tole, (o) details of proposed project, project introduction (max. 200 words), project objective (max. 50 words), area of business (in relation of Section 5), estimated budget of project in NRs, expenditure to-date on project, (p) project analysis and other related details.

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