The self-employment program for educated unemployed youths has come into operation effective from today.
Issuing a circulation to all the banks and financial institutes today, Nepal Rastra Bank, the central bank of Nepal, on Friday directed them to this effect.
With the directive, the NRB has also issued an Integrated Work Procedure, 2075 regarding the subsidized loan.
“We have created ways out for those educated but unemployed people who could self-employment programs by taking a loan from the commercial banks, development banks, and financial institutes by producing their educational certificates as collateral security,” said Executive Director of Nepal Rastra Bank Narayan Prasad Paudel.
Those meeting the following criteria are legible for self-employment loans for educated people.
The loan taken should be below 40 with bachelor’s degree educational qualification
Should have taken a week-long skill-orientated training
A loan proposal with a clear-cut objective
As per the provisions laid down in the procedure, banks cannot charge more than 2 percent interest on the loan.
Of the total interest fixed, commercial banks will get 5 percent interest through NRB while the customers will have to pay the remaining interest.
For instance, if the bank’s base rate interest rate is 10 percent, banks can take up to 12 percent interest on the loan issued.
Of the total interest, the government will bear 5 percent interest while the loan takers will have to pay the remaining 7 percent interest.
The service charge will be free on this type of loan.
Since insurance is mandatory on this kind of loan, loan takers themselves will have to pay 25 percent of insurance premiums while the government will bear 75 percent.
Loan takers have to keep his educational certificate as collateral against this loan which should be cleared within five years.
The areas set for this loan are agriculture, poultry, irrigation, agricultural tools and machine, forest development and promotion of grazing land and land development and conservation.