New procedure for Industrial and Investment Promotion Fund approved

KATHMANDU, DECEMBER 27 : The Council of Ministers has recently approved the Industrial and Investment Promotion Fund Operation Procedure, 2081. This updated framework, introduced by the Ministry of Industry, Commerce, and Supplies, replaces outdated procedures to address contemporary needs. It allows domestic entrepreneurs to access concessional loans of up to NPR 2.5 million.

As per the procedure, the entrepreneurs who meet the specified criteria can secure loans ranging from NPR 300,000 to NPR 2.5 million, with a maximum interest rate of 6%. Banks are authorized to use approved project plans as collateral, streamlining the loan process for applicants.

These institutions may charge a service fee of up to 0.3% of the loan amount, with rates determined based on repayment instalments. For annual repayments covering up to 50% of the loan, a 1% service fee will apply. The repayments between 50% and 80% will incur a 1.5% fee, while the repayments exceeding 80% will attract a 2% fee.

The new guidelines have superseded earlier procedures, including the Women Entrepreneurship Development Fund (Operation) Procedure, 2069, the Micro, Cottage, and Small Industry Development Fund Operation Procedure, 2069, and the Micro, Cottage, and Small Entrepreneurs Technology (Machine, Equipment) Transfer Procedure, 2073. The activities governed by these repealed guidelines will now fall under the scope of the new procedure.

Under the updated framework, eligible beneficiaries include micro, cottage, and small entrepreneurs; industries officially declared as "sick" by the government; provincial and district branches of national associations or federations; and institutions involved in entrepreneurship and industrial research. Women-led enterprises are also encouraged to participate in the program.

The procedure has categorized concessional loans into five primary groups and 19 subgroups. Such loans are expected to support business activities such as purchasing raw materials, transportation, packaging, product diversification, production,  technology acquisition, skill development training, and research on new technologies.

To qualify for receiving the said types of credits, applicants must have prior entrepreneurial experience. Businesses should meet established standards, prioritize innovation, utilize human resources, adopt environmentally sustainable practices, and generate employment opportunities.