Youth fund plans to raise loan limit to Rs 500,000
Youth and Small Entrepreneur Self-Employment Fund is planning to increase the upper limit of the loan to Rs 500,000 without any homework.
The fund that is restricted to provide Rs 200,000 loan to an individual and Rs 5 million to a group of 25 has been under scrutiny due to its controversial operation and lending.
The fund lends banks and financial institutions, and cooperatives in wholesale at a minimum interest rate and they further lend to the unemployed youths to generate employment.
However, the fund started in 2009 has been able to create less employment and surrounded more controversy. The fund has so far invested Rs 2.50 billion under the programme, and claimed to have provided employment to 22,000 youths.
Executive director of the fund Binod Guragain said they were planning to hike the limit as Rs 200,000 was too little to start business.
The fund will however would need additional Rs 20 billion to increase the upper limit, he said, adding that the fund is planning to launch the third phase under which Rs 400 million will be distributed to create jobs for 9,000 more youths.
The youth self-employment programme under the fund is being operational through 1,122 cooperatives in 73 districts. A total of Rs 12.3 million is being mobilised through the cooperatives while the rest of the investment is made through banks and financial institutions.