Young parliamentarians lament banks, reluctance to finance youth-led ventures

CHITWAN, June 3:

Youth Constituent Assembly (CA) members have lamented that the banks and financial institutions (BFIs) were hesitating to issue loans to ventures led by youths despite liquidity surplus in the banking system.

The young lawmakers shared the grievances of the aspiring entrepreneurs during their recent visit to Nawalparasi-based Chaudhary Udyog Gram.

“Many youths in the country are eager to start new business. But they lack funds,” Nepali Congress (NC) leader and CA member Gagan Thapa said. “Unfortunately, BFIs do not trust projects led by youths. They choose only the low-risk projects.”

Thapa stressed the need to bring about policy reforms for overcoming such problem. The young lawmaker also said the government should prioritize agri-based industries for economic growth.

CPN-UML lawmaker Rabindra Adhikari said the private sector should also focus on the development of agriculture sector. “The government can get good return by forming more agriculture cooperatives across the country,” he said, adding, “Unfortunately, there is not a single agriculture cooperative country in the country that we can be proud of.”

Top Bahadur Rayamjhi of UCPN (Maoist) said local community should also be serious for the development of the country. “Not only the government and the cooperatives, people should also be serious for economic development,” he said. “Local communities are misusing subsidies provided by the government. This won´t help.”

Rayamajhi also said funds distributed by the Youth Self-employment Fund introduced by the-Maoist led government were misused by some opportunist officials.

However, NC lawmaker Thapa criticized the fund, saying that such scheme was ´useless´.

Speaking on the occasion, Binod Chaudhary, President of Chaudhary Group, said economic prosperity is possible if the government really wants it. “If the government has firm conviction and willingness, it can do many things like bringing good policies for economic development,” he added.

However, bankers say BFIs are ready to finance the youth-led ventures provided that their investments are secured. Upendra Poudyal, vice president of Nepal Bankers´ Association (NBA), told Republica that banks would finance youth-led business ventures if they feel their investment is safe.

“Banks take collateral for lending. The problem of not getting loan without pledging collateral is a structural economic problem which can be overcome only by the government,” Poudyal said.

He suggested to the government to create a guarantee fund to compensate banks in case the collateral-free loans issued to youth-led projects are defaulted.

Source: Republica