Women Entrepreneurship Dev Fund gets Rs165.8m from MoIMinistry of Industry (MoI), through the Women Entrepreneurship Development Fund, has announced investing Rs165.8 million in the next fiscal year to help women entrepreneurs start their businesses.
Ministry of Industry (MoI), through the Women Entrepreneurship Development Fund, has announced investing Rs165.8 million in the next fiscal year to help women entrepreneurs start their businesses.
Despite an increase in the size of fund every year, the ministry, however, has been facing problem in the recovery of the loan amount provided to the women entrepreneurs due to the weak monitoring mechanism.
The government introduced the programme establishing a fund of Rs100 million through the budget for 2011-12 . Through the fund, the MoI has been providing collateral-free loans to women entrepreneurs in a bid to encourage them to start their own businesses. The government has been providing the soft loan at an interest rate of 6 percent per annum. Shatrughna Prasad Pudasainee, director general of Department of Industry, told a meeting of sub-committee of the parliamentary Industry, Commerce and Consumer Welfare Protection on Friday that they would be providing support to 765 women entrepreneurs from 41 districts in the next fiscal year.
According to him, they have been facing problem in recovering loan as many borrowers have been turning away from paying back the loan amount. “The loan recovery rate seems to stand just between 5-10 percent,” Pudasainee said.
The slow rate of loan recovery has been blamed on entrepreneurs who choose not to pay back loan provided by the government body. “A number of women refuse to clear their liabilities on time as they think it’s a government grant and so that they do not have to repay it,” Pudasainee said.
Lawmakers on the other hand showed the cause of the high interest rate and small payback period behind increasing defaulting cases. “As the interest rate in the soft loan is reasonably high at 6 percent and also the payback period is only three years, many women entrepreneurs have been complaining for not being able to payback their loan on time,” said Lawmaker Rajya Laxmi Shrestha.
Lawmakers also blamed the ministry’s apathy for the slow recovery of the loan amount. “Although the working guideline has clearly mentioned forming monitoring committee under the MoI and related bodies, the ministry is yet to develop the mechanism,” Shrestha added. The government earlier had expected to empower at least 3,300 women entrepreneurs by encouraging them to start their own businesses if the programme had been properly implemented. But through a combination of MoI’s delay in enforcing guidelines and lack of coordination between the Finance and Industry ministries, the programme failed to meet its target.
As of now, the government has invested Rs23.7 million on 348 women under the programme. The government launched the programme in 2014-15 and provided loans of Rs14.3 million to 119 women entrepreneurs in the first year of the commencement.