The government has allocated Rs500 million for the Challenge Fund which will be used to finance innovations.
The government had failed to implement a similar initiative, named “Start-up Fund”, last fiscal year largely due to a dispute between the Finance Ministry and the Industry Ministry over who runs the fund.
A primary objective of the Start-up Fund was to provide seed money to innovators who have ideas, but do not have resources to make the idea a reality. There is a global
trend of funding innovative ideas so that they could turn out be contributors to the national economy.
“We are now preparing a guideline of the Challenge Fund. Once the guideline is introduced, we will look into providing seed money to innovative ideas,” said Baikuntha Aryal, chief of the Finance Ministry’s Budget Division. “We will probably complete the preparations within a month.”
He said the guideline was likely to adopt a provision under which the government would call proposals of innovative ideas from individuals and institutions and the best ideas would be given the seed money. He said the ministry was this time determined to make the Challenge Fund a success.
The Industry Ministry has proposed integrating its Technology Fund and Start-up Fund in the Challenge Fund that will be operated under the Finance Ministry, according to Aryal.
There is also the Youth and Small Enterprises Self Employment Fund (YSESEF) in place that offers up to Rs200,000 to enterprises run by the youths.
“The concept of the Challenge Fund is completely different from that of the YSESEF,” said Aryal. “There is not much restriction in funding like that in the YSESEF as long as it is not too high.”
He said the government could increase the size as per the need although Rs500 million has been set aside for now.