Youth fund plans to raise loan limit to Rs 500k
KATHMANDU, MAR 20 - Despite the controversy surrounding the Youth Self-Employment Programme (YSEP) that its loans are being misused, its implementing agency the Youth and Small Entrepreneur Self-Employment Fund (YSESEF) has been working to stretch the upper limit to Rs 500,000.
The YSESEF is restricted to providing loans of up to Rs 200,000 to an individual and up to Rs 5 million to a group of 25. The actual loans are provided by banks, financial institutions and cooperatives which obtain wholesale credit from the YSESEF at minimum interest rates.
The ambitious government programme, designed to create jobs for unemployed young people by providing subsidized loans to start small business es, was launched in 2009.
YSESEF Executive Director Binod Guragain said they were working to hike the maximum limit of loans due to growing complaints from aspirant youths that the money was too little compared to their requirement. “We have started talks with the stakeholders over the possibility of increasing the size of the loans,” he said. The fund will have to revise its regulation for this purpose.
Guragain said that bigger loans could help youths wishing to be self-employed to start larger business es. According to him, they would need another Rs 20 billion to increase the upper limit of the potential loans to Rs 500,000 for an individual.
The YSESEF has been considering launching the third phase of its programme under which Rs 400 million will be distributed to create jobs for 9,000 more youths. Its plan to increase the grant amount comes at a time when controversy has been raging that the fund has been misused due to the influence of some political parties.
Guragain refused to comment on the charges on the telephone. He said that increasing the loan amount had become necessary to enable youths to start their dream projects which might need more capital.
Meanwhile, the YSESEF has been asking Nepal Rastra Bank (NRB) to make a provision that one-third of the deprived sector lending of BFIs should go to the programme under the YSEP. “We have been holding talks with the central bank in this regard,” he added. NRB has categorised such loans under the category of deprived sector lending, and they are provided without collateral.
The YSESEF has so far invested Rs 2.50 billion under the programme which it claims to have provided employment to 22,000 youths. According to the fund, 60 percent of these youths are engaged in the production business .
The youth self-employment programme under the YSESEF is being run through 1,122 cooperatives in 73 districts. A total of Rs 12.3 million is being mobilized through these cooperatives while the rest of the investment is made through banks and financial institutions.
Source: The Kathmandu Post
