Nepal Tightens Startup Loan Criteria — Minimum 50 Marks Required for Eligibility Under Revised Policy

The Government of Nepal has introduced stricter evaluation standards for startups seeking concessional loans under the national Startup Enterprise Credit Program. According to the amended “Startup Enterprise Credit Operation Procedures, 2082,” entrepreneurs must now secure a minimum of 50 marks in the evaluation process to qualify for government-backed loans.

The amendment, issued by the Ministry of Industry, Commerce, and Supplies, aims to enhance transparency, accountability, and quality in the selection process for startups receiving subsidized loans.

Overview of the Startup Loan Scheme

The concessional loan program — implemented through the Industrial Business Development Institution (IBDI) — has been in operation for the past two years. It provides low-interest startup loans at just 3% per annum, a rate substantially below market lending rates.

The IBDI calls for proposals periodically, evaluates applicants based on business feasibility, innovation, sustainability, and socio-economic impact, and then recommends selected enterprises for credit disbursement. The actual lending is conducted by the Rastriya Banijya Bank (RBB), which receives a service fee for managing the government’s loan disbursement.

Under the revised framework, only those applicants who score at least 50 marks during evaluation will be considered for recommendation. Among them, enterprises with the highest scores will be prioritized in the final loan approval list.

Detailed Evaluation Mechanism

Clause 12 of the amended procedures specifies that:

“The Evaluation Committee shall prioritize and recommend for approval those proposals that have scored a minimum of 50 percent of the total marks, ranking them in descending order of their scores.”

Once the final recommendation list is approved by the Executive Director of the IBDI, it will be forwarded to Rastriya Banijya Bank for loan disbursement. The institution must also determine and recommend the exact loan amount to be granted to each selected startup, based on the proposed financial plan.

Furthermore, the IBDI is authorized to conduct entrepreneurship and business management training for loan recipients to ensure better utilization of funds and project sustainability.

Transparency and Accountability Provisions

The revised procedures emphasize transparency and communication with applicants. The IBDI must publicly disclose the list of approved and recommended startups on its official website and notify applicants via phone or SMS.

Successful applicants are required to contact the designated bank within 30 days of receiving the approval notice to initiate the loan disbursement process. Failure to do so within the time frame may lead to forfeiture of the loan opportunity.

Loan Range and Policy Intent

Under the government’s startup policy, eligible businesses and entrepreneurs can obtain loans ranging from Rs. 500,000 (five lakh) to Rs. 2.5 million (25 lakh) at an annual interest rate of only 3 percent. The program was designed to encourage innovation, self-employment, and youth entrepreneurship, addressing Nepal’s chronic underemployment and startup funding gap.

However, the tightening of evaluation standards — requiring at least 50 marks — is expected to filter out weaker or less-prepared proposals, ensuring that only serious and viable business ideas receive funding.

The new rule signals a shift from blanket inclusivity to merit-based selection in Nepal’s startup financing ecosystem. While this move may reduce the number of beneficiaries, it could improve loan recovery rates, project success, and fiscal discipline within the subsidized credit program.

Experts argue that earlier rounds of startup lending faced issues of weak project design, poor follow-up, and political influence, leading to limited economic impact. By setting a performance benchmark, the Ministry appears to be reinforcing accountability on both evaluators and entrepreneurs.

At the same time, policymakers must ensure that young innovators from rural and marginalized areas — who may lack formal proposal-writing expertise — are not discouraged or excluded due to technical barriers. Balancing rigor with inclusivity will be critical to maintaining the spirit of the program.

With the introduction of the 50-mark eligibility threshold, Nepal’s startup loan program enters a new, more selective phase. The government aims to prioritize innovation, feasibility, and business readiness over mere intent, signaling a maturing approach to entrepreneurship support.

If implemented transparently and accompanied by training and mentorship, this reform could strengthen Nepal’s startup ecosystem, improve credit utilization, and foster sustainable enterprise growth — turning public funds into productive capital for the nation’s emerging entrepreneurs.