Like every year, the government invited wannabe entrepreneurs to apply for cheap financing. And like every year, hundreds of hopefuls entered the shark tank, half were rejected, half got through, but the promised money never came.

On March 30, the Department of Industry had called start-ups with innovative knowledge, ideas, skills and capacity to submit their business proposals by April 19.

The department received 425 proposals of which 212 were approved. The successful applicants were to get up to Rs2.5 million at 3 percent interest for this fiscal year.

There are only a few days left before the fiscal year ends on July 16, and there is still no sign of the money.

“We did not receive the pledged budget allocation of Rs250 million from the Industry Ministry,” said Khagendra Bahadur Basnet, director of the Industry Department. “It looks like the scheme will not run this fiscal year. We hope that it will run next year.”

The plan, as originally announced by the National Planning Commission in May 2020, was to give Rs5 million each at 2 percent interest.

The planning commission, which creates the country’s development plans and policies, had received more than 600 proposals but the scheme unravelled. Start-ups say the government has been duping them since the beginning.

Ramesh Timilsina, co-founder of home inspection company Skill Sewa, told the Post in a recent interview that they had submitted a 60-page proposal to the National Planning Commission to get the subsidised loan.

“But the scheme was a non-starter.” Timilsina said they stopped applying after that. “It’s a political stunt rather than help for start-ups.”

The government has said in the budget statement for the next fiscal year that it has set aside Rs1.25 billion to encourage start-ups.

Basnet says he is not sure if the short listed applications of this fiscal year would be carried forward to the next fiscal year's scheme. “If not, we have to invite fresh applications,” he said.

The disappointed start-ups say the government has been giving them false hopes every year.

For the next fiscal year, a Rs1.20 billion budget has been allocated to implement the Youth Start-Up Programme which will help young people to develop their entrepreneurial skills, mainly in agriculture and livestock.

The budget statement has also mentioned operating an incubation centre in Kathmandu to cultivate entrepreneurial thinking and culture and transform this thinking into businesses.

Venture capital and private equity funds will be encouraged to invest in start-up businesses, according to the budget statement.

Start-ups have criticised the government for making pledges that only remain on paper.

According to a World Bank report, Nepal’s businesses have begun to digitise, and technology start-ups are emerging.

Nepal has a dynamically developing IT sector that focuses on application development, consulting and system integration services with growing IT services exports. There are over 350 start-ups in areas such as software as a service, travel, health, education, real estate technology and e-commerce.

The Covid-19 pandemic accelerated start-up activities with entrepreneurs launching mobile money, e-commerce, online learning and telehealth applications.

According to the report, relatively unconstrained by gaps in physical infrastructure (such as roads), logistics, high land prices and small domestic market, the IT services sector can expand good job opportunities for skilled youth, improve the productivity of other sectors and facilitate good governance.

Start-ups say that failure to implement programmes and projects to promote innovation is the result of announcing the scheme without any proper internal preparation.

“This shows that the government plans are half-baked and the decision-makers lack understanding of start-ups,” they say.

Fast turnover of government officials has also hindered proper implementation of the programme.

The loan scheme for young entrepreneurs was introduced in 2018 by the Oli administration to encourage self-employment. The government then began to draw up a work procedure to distribute the funds. It’s been years, but the work procedure remains a work in progress.

In October 2021, the then finance minister Janardan Sharma said the work procedure would be implemented soon to help start-ups and innovators.

The budget for the fiscal year 2021-22 had announced issuing Rs2.5 million in seed capital at 1 percent interest to encourage youth entrepreneurs.

Banks and financial institutions are confused about making investments because of the absence of a definition of start-up, according to young entrepreneurs.