Women entrepreneurs to get subsidized, collateral-free loan

Ministry of Industry (MoI) has sought proposals from the women-run enterprises for subsidized loans from ‘Woman Enterprises Development Fund’.

The government had established fund worth Rs 400 million for issuing subsidized loans to women farmers four years ago.
Under the scheme, firms owned and operated by women entrepreneurs can apply for subsidized loans ranging from Rs 100,000 to Rs 500,000. The government fixed interest rate of 6 percent for such loans.

“The best part of this scheme is that women entitled for such loans do not need to furnish any collateral,” Bishnu Prasad Dhakal, under secretary at MoI, said. The ministry has fixed a repayment period of three years for such loans.

“The borrower will get one percent discount on interest rate if such enterprises repay loan on time,” he added.Women entrepreneurs from 10 districts will be able to apply for the loans in the first phase. Women entrepreneurs from Khotang, Makwanpur, Kathmandu, Lalitpur, Bhaktapur, Baglung, Pyuthan, Kailali, Kalikot and Bajura can apply for the loans, according to the notice of Department of Cottage and Small Industries (DoCSI).

The applications from women entrepreneurs will be reviewed by an evaluation committee led by the Director General of DoCSI. The subsidized loans will be provided through Rastriya Banijya Bank Ltd (RBBL). DoCSI and RBBL have already signed an agreement to this effect.

According to the Working Procedures of Woman Enterprises Development Fund, women-run enterprises should be nominated by any business association or federation to be eligible for such loans. However, experts say such provision may pose problem for women entrepreneurs are not affiliated to any association.

Sharada Rijal, vice president of Federation of Woman Entrepreneurs’ Association of Nepal (FWEAN), however, told Republica that the criteria of affiliation to any business association will not deter any woman entrepreneur from seeking the subsidized loan. “Most of the firms led by woman are affiliated to one or another federation. So, requirement of the nomination from such associations do not affect the women entrepreneurs from applying for subsidized loans,” she said, adding: “This provision will help to ensure that such loan borrowed by the woman do not go default.”

Source: Republica