While Governments Struggle to Retain Youth, Nabil Bank Bets on Returnee Entrepreneurs

Successive governments in Nepal have repeatedly spoken of bringing back migrant workers, even as they have failed to create conditions that prevent young people from leaving in the first place. Despite political promises, outward migration continues to rise, and the country has struggled not only to attract returnees but also to retain those still at home. Against this backdrop, a rare institutional initiative from the banking sector has begun to draw attention.

Many Nepali youths who spend years working abroad express a desire to return home voluntarily. Some plan to come back permanently, while others seek to establish businesses in Nepal through family members while still employed overseas. However, such aspirations often collide with a lack of access to finance, unclear policies, and weak state support. For years, returnee migrants have largely depended on personal savings or informal borrowing to start economic activities.

In contrast to this broader policy vacuum, Nabil Bank has been providing targeted financial support to migrant and returnee entrepreneurs over the past two years. The bank has been extending loans not only to Nepalis returning with skills acquired abroad but also to families of migrant workers seeking to start or expand businesses in Nepal. Bank officials say the initiative is designed to convert migration experience into productive domestic investment.

The scheme, branded as the Nabil Skilled Migrant Entrepreneurship Loan, was launched on Magh 11, 2080, by then Minister for Labour, Employment and Social Security Sharat Singh Bhandari. It specifically targets individuals who have acquired skills abroad and wish to apply them within Nepal’s economy. The idea, according to the bank, is to bridge the critical gap between intent and execution that often discourages returnees from pursuing entrepreneurship.

Addressing the Income Gap After Return

One of the most immediate challenges faced by returnee migrants is the sudden loss of regular income. Relying solely on savings accumulated abroad is neither sustainable nor advisable, particularly in an economy where business setup costs are rising. As a result, many returnees prefer to prepare in advance—launching businesses through family members before their return—so that income generation begins immediately.

Nabil Bank’s loan scheme seeks to respond to this reality. According to the bank, several borrowers have already used the facility to establish successful ventures, suggesting that access to timely and flexible credit can significantly improve post-return outcomes. Analysts say such interventions reduce the risk of re-migration, which remains a common fallback option for failed returnees.

Who Can Access the Loan?

The loan is available to Nepali citizens currently working abroad, returnee migrants, and families of migrant workers residing in Nepal. Financing is provided for income-generating and business activities, ranging from small enterprises to medium-scale commercial ventures. By expanding eligibility beyond returnees themselves, the scheme recognises the role of family-managed businesses in Nepal’s migrant economy.

The interest rate is described by the bank as competitive and relatively low, a crucial factor given the sensitivity of new businesses to financing costs. The maximum loan ceiling extends up to NPR 100 million, allowing the scheme to cater not only to micro-entrepreneurs but also to larger ventures.

Collateral-Free Credit and Flexible Structures

For projects in the deprived sector category, loans of up to NPR 1.5 million are available. Small businesses can access credit based on working capital, with financing of up to 60 percent of current assets, without the need for collateral. This feature addresses one of the biggest barriers faced by young entrepreneurs—lack of property to pledge as security.

For borrowers able to provide land or other fixed assets as collateral, the loan ceiling can be increased. Financing of up to 80 percent is available when both current and fixed assets are pledged, with a loan-to-value ratio of 70 percent. Where fixed assets are limited, loans of up to 70 percent of combined asset value are offered, with a lower LTV ratio.

The loan tenure extends up to 72 months, with a grace period of 12 months during which neither principal nor interest is payable. Monthly instalments begin thereafter, providing borrowers with time to stabilise their businesses before repayment begins.

Support Across SME Categories

The scheme also covers small and emerging SMEs, with loan amounts ranging from NPR 1.5 million to NPR 20 million, while medium SMEs can access financing between NPR 20 million and NPR 50 million. Larger medium-scale enterprises are eligible for loans up to NPR 100 million.

Depending on the nature of the project, borrowers can receive financing of up to 80 percent of working capital or capital expenditure. Loan tenures range from 10 to 12 years, with both term loans and working capital facilities available. While term loans require monthly EMI payments, working capital loans are repayable upon demand or at maturity, with interest paid quarterly.

Faster Processing, Institutional Commitment

Nabil Bank says loan approval is granted within seven days once all required documents are submitted, followed by post-approval processing within five days. In a system often criticised for delays and bureaucratic hurdles, this accelerated timeline is being seen as a significant advantage for time-sensitive entrepreneurs.

Policy analysts note that while such initiatives cannot replace comprehensive state-led migration and employment strategies, they demonstrate how financial institutions can play a catalytic role. In an environment where political rhetoric has outpaced practical solutions, targeted credit schemes like this offer a pragmatic pathway to transform migration from a survival strategy into a development asset.