Over 10,000 Youth Apply for Startup Loan Scheme, Government Pushes AI-Driven Selection

Nepal’s government-backed startup loan program has attracted an overwhelming response this fiscal year, with more than 10,000 young entrepreneurs submitting project proposals from across the country. The surge in applications reflects a growing interest among youth in entrepreneurship, even as traditional job opportunities remain limited.

According to the Ministry of Industry, Commerce and Supplies, a total of 10,244 project proposals were received within the stipulated deadline for the current fiscal year 2082/83. Of these, 8,203 applications were submitted through digital platforms, while 2,041 were registered physically. The increasing share of online submissions indicates a gradual shift toward digital engagement in government programs.

The government has allocated Rs 860 million for the program this year, under which selected startups will be eligible for collateral-free loans at a subsidized interest rate of 3 percent. This concessional financing is aimed at lowering entry barriers for new entrepreneurs and encouraging innovation-driven businesses, particularly among the youth.

What sets this year’s program apart is the use of technology in the evaluation process. The ministry has introduced artificial intelligence tools for preliminary screening, claiming an accuracy rate of around 80 percent in assessing project proposals. This move is intended to make the selection process faster, more transparent, and less prone to human bias—an issue that has often been raised in previous iterations of similar programs.

Following the initial AI-based screening, shortlisted projects will undergo a credit information check through banks. Only those entrepreneurs who score more than 50 marks in the evaluation process will be recommended for loan approval. This multi-layered screening mechanism suggests a shift toward more structured and performance-based selection criteria.

Despite the program’s strong uptake, it also highlights a deeper economic reality. The high number of applicants signals both rising entrepreneurial ambition and the lack of sufficient employment opportunities in the formal sector. For many young people, access to affordable financing has become a critical pathway to self-employment and business creation.

At the same time, the success of the initiative will depend largely on implementation. Past experiences with subsidized loan programs have shown challenges in fund disbursement, monitoring, and business sustainability. Ensuring that selected startups receive not only financing but also technical support and market access will be crucial for long-term impact.

From a policy perspective, the integration of AI into public sector decision-making marks an important step toward modernization. However, questions may remain regarding transparency, algorithmic fairness, and accountability, particularly in cases where applications are rejected at the screening stage.

Overall, the program represents a significant effort by the government to foster an entrepreneurial ecosystem in Nepal. If executed effectively, it has the potential to generate employment, promote innovation, and contribute to economic diversification. However, its true success will ultimately be measured not by the number of applications received, but by the sustainability and growth of the businesses it supports.