Kopila Hitanga of Tansen Municipality became an entrepreneur by digging a pond in her yard to rear fish. “I have received fishery training, and my husband is also helping me,” she said.

Hitanga borrowed Rs500,000 at 3 percent interest from Nepal Bank to start her fishery business. Her husband, who returned home last March from an overseas job after being laid off by Covid-19, is providing her support. He lost interest in going abroad to find employment after joining his wife in her new venture.

Tansen Municipality has launched an interest-free, collateral-free loan plan to support start-ups.

The municipality, in coordination with the Rural Economic Development Association, a non-profit making community working to promote business activities in Tansen, and the United Nations Development Programme, has been imparting training and know-how to local communities to help them become self-employed.

“I received the training, and the bank also supported me with a subsidized and collateral-free loan,” said Hitanga, who is optimistic that her fish pond will give her a good yield.

Uma Aryal of Tansen Municipality, Madanpokhari has also become an entrepreneur. She opened an enterprise that produces women’s sanitary pads, and has hired five people. Her husband is also helping her to run the business.

Aryal is among the 235 beneficiaries who participated in the Youth Self-Employment Programme that has accorded top priority to returnee migrants. “I had confidence to work. I applied for the programme,” she said.

The sanitary pads produced by Aryal’s firm have been well received by customers. “I am very encouraged as demand for the product has increased in the market,” said Aryal, who has taken a Rs500,000 loan at a subsidized interest rate. She plans to borrow additional capital to expand her business.

Shrawan Lamsal joined the Youth Self-Employment Programme immediately after returning to Nepal from his foreign job in which he was engaged for four years.

Covid-19 put him out of work, and he was forced to return home. He received training in dairy farming conducted by the Rural Economic Development Association.

Lamsal now owns five cows and a buffalo. He took a Rs500,000 loan at an interest rate of 3.92 percent. “I have been making a handsome income,” he said. “I am confident of being able to make my instalment and interest payments on time.”

These entrepreneurs are examples of the beneficiaries of the initiative launched by Tansen Municipality to promote self-employment. The municipality claims that it has set an example by employing foreign returnees in the country.

Tansen Mayor Ashok Kumar Shahi said their aim was to employ 800 youths in the current fiscal year. “Covid-19 has certainly affected our plan, but we are optimistic of employing 500 youths this fiscal year.”

According to him, 236 youths have applied to join the programme in the first phase. “We will select the projects and invest in them after making a proper assessment,” said Shahi.

"The programme enables youths to open a business of their choice,” he said, adding that they had imparted training to most of the selected youths.

The municipality has deposited Rs15 million as collateral at Nepal Bank. The municipality has pledged to invest more than Rs60 million in the Youth Self-Employment Programme as per the agreement.

Youths can take loans of up to Rs500,000 without collateral. As per the Youth Self-Employment Programme guideline, subsidized and collateral-free loans are given to youths in sectors like vegetable production, seeds production, animal husbandry and livestock farming, floriculture and horticulture.

“In the past, we were forced to borrow money at an interest rate of up to 24 percent,” said Chunu Pandey, proprietor of Ganesh Paper Plant. “The municipality campaign has greatly helped people like us who have dreams of launching upscale projects but lack funding.”

According to Suraj Ghimire, manager of Nepal Bank’s Tansen branch, 120 people had taken these loans as of now. “If they pay the interest and instalments on time, they will get a discount too.”

He said that the programme was a good initiative at a time when hordes of Nepalis are forced to travel abroad due to lack of employment in the country. Start-ups have been facing problems of high interest rates and obtaining loans is also a big hassle.

“Such programmes will enable the youth to work in their country and stem the brain drain,” said Ghimire.

Besides offering interest-free, collateral-free loans to youths to promote self-employment, the local government, donor agencies and organisations in Palpa have been active in maintaining the identity of Palpali dhaka cloth in recent times, said Leela Bahadur Karki, executive director of the Rural Economic Development Association.

"The scheme aims to produce at least 1,500 dhaka entrepreneurs in three years—500 entrepreneurs annually.