Pun tells FinMin staff to energize sluggish YSEF

KATHMANDU, FEB 25 -

Finance Minister Barsha Man Pun on Sunday directed ministry officials to energize the Youth Self-Employment Programme (YSEF) as it has not been able to distribute loans as planned.

The government has aimed to create 30,000 jobs during this fiscal year alone under the YSEF by providing capital through government-owned banks. However, only 6,500 youths have so far obtained credit and started their own enterprises, said the Finance Ministry.

After private banks refused to issue credit without collateral, the government pushed the programme ahead through state-owned banks including Agricultural Development Bank and Rastriya Banijya Bank.

About a year ago, the two banks took Rs 1 billion each from the Youth and Small Entrepreneurs Self-Employment Fund that runs the programme to provide loans to potential youth entrepreneurs. However, they have lent less than Rs 300 million so far, said the Finance Ministry in a press release.

Speaking at a meeting of the ministry-level development problem solution committee held on Sunday, the finance minister also told officials to check whether the loans taken under the programme had been used for the intended purposes.

Meanwhile, Nepal Rastra Bank governor Yubaraj Khatiwada explained the risks involved for banks lending under the programme. “It would be better to ask borrowers  who can put up collateral to do so and issue collateral-free loans only to those without any assets,” he said.

Finance Minister Pun also expressed concern over a possible cash shortage to subsidize insurance coverage of livestock and crops.

Source: The Kathmandu Post