The government has planned to establish a start-up fund in the coming fiscal year in a bid to cultivate the culture of entrepreneurship and promote fresh ideas. Presenting the budget for fiscal 2014-15, Finance Minister Ram Sharan Mahat said that the government would set up a Rs 500 million fund to bankroll promising start-ups.
“The fund will encourage fresh small and medium scale business ideas having potential but no financing,” said Mahat. He added that the private sector and non-resident Nepalis (NRNs) too would be urged to contribute to the seed fund established by the government.
Meanwhile, Pashupati Murarka, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said that the criteria and working procedure should be established at the earliest possible to make the allotted resources useful.
“Though the seed amount is not large, the initiative is good. The government will have to work out an implementation plan as soon as possible,” said Murarka. According to him, the private sector can only decide how to support the programme once there is clarity about its working modality.
Likewise, Hari Bhakta Sharma, vice-president of the Confederation of Nepalese Industries (CNI) lauded the initiative. “We have been suggesting to the government time and again to come up with such initiatives. A start-up fund is a positive approach of the government.”
He added the government should focus on the implementation aspect without delay. “Due to frequent lobbying from our side, the government had allotted an R&D fund of Rs 5 million last time. However, it could not be implemented on time due to the government’s apathy. This should not happen again.”
As for the government’s declaration of urging the private sector to take the initiative forward, Sharma said that the CNI could work on as an implementing partner of the programme if it is allowed to develop a modality and work accordingly. He added the government should coordinate closely with the private sector as it suffered from a manpower shortage and its implementation aspect too was weak.
The private sector has been looking at the fund with scepticism and doubts that the fund will be used properly. An industrialist who wished to remain unnamed said that the programme could only be implemented in its true spirit if it was not mobilized to fulfil political interests. “You can take the example of the youth self-employment programme. Politicians should not take it as a means to reward their cadres,” he said.
Likewise, the budget has presented plans to initiate a number of programmes to help foreign investors and young entrepreneurs invest in Nepal. The budget has focused on making greater use of information technology (IT) at government institutions to enhance efficiency and provide faster service.
Companies exporting software and operating courier services from Nepal will be allowed to accept online payment from the upcoming fiscal year. Since most of the start-up businesses in Nepal are related directly or indirectly to IT, the initiative is likely to increase their number besides encouraging those operating clandestinely to come out in the open.
Binod Dhakal, president of the Computer Association of Nepal, said lack of digital signatures and payment gateways were among the two major issues hindering the growth of the IT sector.
Govt to establish Rs 500m fund to bankroll start-ups usiness.