Finding investors in Nepal isn’t easy especially when you have bold ideas but no property to pledge. That’s where the government’s Startup Enterprise Loan Program steps in. Launched under the Startup Enterprise Loan Operation Procedure, 2082, this initiative offers hope and capital  to entrepreneurs who dare to innovate without the comfort of collateral.

Implemented by the Industrial Enterprise Development Institute (IEDI) under the Ministry of Industry, Commerce and Supplies (MoICS), the program provides loans of up to Rs. 25 lakh at an exceptionally low 3 percent annual interest rate and the best part? No land or property required.

In the last fiscal year alone (2081/82), IEDI approved concessional loans for 661 startups, while the year before, 165 startups benefited from the same scheme. The steady rise in participation shows a growing belief that even idea-stage businesses deserve a fair shot at success.

How It Works

At the policy level, the Ministry of Industry, Commerce and Supplies sets the rules, allocates funds, and oversees the entire framework. But the day-to-day execution lies in the hands of IEDI, the institution bridging the gap between the government and Nepal’s entrepreneurial community.

IEDI’s role is to announce the loan call, collect applications, evaluate proposals, and recommend eligible startups to participating banks. Once approved, the selected entrepreneurs receive the funds directly from government-partnered commercial banks such as Rastriya Banijya Bank, Nabil Bank, or Laxmi Sunrise Bank and begin repayment at the concessional 3 percent rate.

This year, the government has allocated Rs. 73 crore for the startup loan program, signaling its long-term commitment to nurturing innovation and employment through small-scale enterprises. If the program continues to perform well, officials have hinted that additional funds could follow.

In simple terms, the Ministry handles policy and budgeting, IEDI manages applications, and banks release and recover loans. The entire system is designed to make the process streamlined and transparent ensuring that entrepreneurs don’t have to run from one office to another to get their business off the ground.

Who Can Apply for the Startup Loan?

This scheme is not a blanket offer for every registered business. It’s specifically targeted toward startups early-stage ventures still in their growth or experimentation phase, building something new or improving existing systems.

Registration Requirement:
Applicants must have a legally registered business as a Private Firm, Partnership, Company, or Cooperative. Ideas alone don’t qualify; you need a registered entity before applying.

Business Age and Size:
Your business should be less than 10 years old and have an annual turnover not exceeding Rs. 15 crore. This ensures that the benefits go to small and emerging enterprises, not large, established ones.

Nature of Business:
The program gives preference to ventures that are innovation- or technology-driven enterprises introducing creative solutions, improving processes, or creating new value. You don’t have to be developing an advanced app or a high-tech startup. Using drones in agriculture, converting waste into useful products, or building affordable local tools can all qualify if your idea contributes to efficiency or problem-solving.

If your business adds value, creates jobs, or uses innovation to make life better you’re exactly who this policy is designed for.

Who Is Not Eligible for the Startup Loan

While the program is designed to be inclusive, not every business qualifies. Enterprises that primarily import and resell goods are not eligible, as the focus is on encouraging production, innovation, and value creation within the country.

Similarly, individuals or firms blacklisted by banks or regulatory bodies, holding or investment companies, and any business registered after the official loan notice is published will be automatically disqualified.

Another important restriction is that if you have already received a concessional or startup loan from any government scheme, you cannot apply again under this program. The goal is to give new applicants an equal opportunity rather than repeat financing to the same group.

How Much Can You Borrow?

Loans will be given at concessional interest rates from a minimum of Rs 500,000 to a maximum of Rs 2.5 million. 

Loan Terms and Repayment Structure

The interest rate is fixed at a concessional 3 percent per year, making it one of the most affordable financing options in the market. Borrowers can repay the amount over a period of up to five years, with an optional one-year grace period after receiving the first installment.

However, entrepreneurs should note that the repayment timeline follows Nepal’s fiscal year rather than the individual disbursement date. This means that if your loan is approved and released toward the end of fiscal year 2082/83, your official repayment period begins in 2083/84, not exactly a year after the first disbursement.

The most encouraging part is that there is no collateral requirement. Instead of land or property, your business idea, plan, and execution strategy serve as the main security for the loan. In other words, the strength of your proposal determines your approval, not your real estate portfolio.

How the Loan Released 

The loan amount is not handed over all at once. It is disbursed in multiple installments, usually two or three, depending on the nature and progress of your project. After the first installment, you must show proof of proper utilization through bills, invoices, or site inspections conducted by the partner bank. Once verified, the next installment is released.

This phased approach helps maintain accountability while ensuring the funds are being used for their intended purpose. It also protects startups from overspending too early in their growth stage.

The structure balances trust with transparency by giving entrepreneurs access to capital while ensuring that public funds are managed responsibly.

Documents to Include with Your Startup Loan Proposal

Before submitting your application, it’s crucial to prepare all the necessary documents that establish your business’s legality, credibility, and seriousness. These papers are what help evaluators see that your enterprise isn’t just an idea, but a functioning and future-ready business.

1. Registration and Renewal Certificates

Attach a copy of your business registration certificate along with its latest renewal. This confirms that your enterprise is officially recognized and actively operating. It assures IEDI and the review committee that your business exists in practice, not just on paper.

2. PAN Certificate and Tax Clearance

Provide a copy of your Permanent Account Number (PAN) and the tax clearance certificate from the previous fiscal year.
If your company is newly established and hasn’t yet filed taxes, mention that clearly in your application. For those who have, up-to-date tax records reflect good compliance and financial responsibility.

3. Audited Financial Statements

Submit your audited financial statements for the previous fiscal year. Even if your revenue is minimal, having the figures reviewed by an auditor adds credibility and transparency. It also gives evaluators a clear picture of your business’s financial discipline and growth potential.

4. Citizenship of the Authorized Representative

Include a copy of the citizenship certificate of the individual officially representing the enterprise. This could be the owner, a managing partner, or a company director. This document is used for identification and to ensure accountability during the evaluation and lending process.

5. Proof of Innovation or Technology Use

This is where you highlight what makes your startup unique. Provide any documentation, prototype, patent, or written explanation that shows how your business uses technology or innovation. Whether you’re using digital tools, developing new methods, or applying creative solutions to traditional challenges, this evidence helps demonstrate that your startup is adding genuine value to the market.

6. Employee Salary Details

Include the salary statement of your employees or workers for the last fiscal year. This allows IEDI to gauge your business size, structure, and contribution to job creation, all of which are key factors in the loan evaluation process.

The startup loan program may look like a financial scheme at first glance, but it’s also a test of credibility. The government wants to support creative entrepreneurs, but it also wants to ensure that public funds go to those who are organized, transparent, and committed to long-term growth.

So, before hitting “submit,” double-check that every document supports the story your proposal tells about your business.

When and How to Apply for the Startup Loan

Once you’ve gathered your paperwork, the next step is timing your application correctly. The Industrial Enterprise Development Institute (IEDI) opens calls for applications through a public notice that appears in national newspapers such as Gorkhapatra and on official online platforms.

From the date of publication, applicants get 21 days to submit their proposals. It might seem like enough time, but preparing a solid business plan, gathering documents, and calculating financials can take longer than expected. Planning ahead is essential.

Submitting Your Proposal

IEDI provides a specific proposal format that applicants must follow. Your submission should clearly include:

• The purpose and goals of your project
  
• A detailed cost and budget breakdown
  
• Projected revenue or return on investment
  
• The number of jobs your startup will create
  

You’ll also need to include a self-declaration confirming that you have not previously received any concessional or startup loan from the government.

It’s important to be truthful in every part of your application. If any information you submit is found to be false, your loan can be cancelled at any stage, even after approval. Transparency and honesty weigh more heavily than exaggerated projections.

Applying for the startup loan is not just a formality; it’s an opportunity to pitch your vision in a structured way. Treat it as your chance to show that your idea is realistic, your numbers make sense, and your execution plan is ready to go.

If you need any help in applying for this loan, do let us know. We are here to help.