Poor women deprived of soft loan after budget freeze

Women who have nothing to pawn to get a bank loan but were looking forward to getting it from the government to start small enterprises on their own have been disappointed after Rs 10 million - which government had allocated to establish a National Woman Entrepreneurship Trust (NEWT) - was frozen in the previous fiscal year 2011/12.
The allocated budget was frozen after the Ministry of Finance (MoF) didn´t work to establish NWET on time. “Technically, the MoF had to coordinate with the Nepal Rastra Bank (NRB) to establish the NWET,” an official at the MoI said. “That has deprived women to get soft loan from the government to start their business.” (break)
The government had announced its intention to establish the NWET with a guideline to operate it. According to the guideline approved by the cabinet in fiscal year 2011/12, women would get up to Rs 300,000 at the 10 percent interest rate. “If they paid back the principle in time, there was a provision to waive off 40 percent of total interest.
The MoI, entrusted to carry out the program, had planned to distribute soft loans to 33 women from three districts each from Terai, hill and mountainous region. “The process should begin again after the budget was frozen in last fiscal year,” Yam Kumari Khatiwada, joint secretary at the MoI told Republica on Sunday.
The ministry was working on to establish the trust as per the provision in the Industrial Policy 2010, which envisages establishment of the NEWT. “The ministry had decided to issue unsecured loans to women following complaints from entrepreneurs who said their access to collateral-free credit was very limited,” Khatiwada said.
Additionally, the industry ministry had decided to mobilize commercial banks to distribute the loan. “In return, the government was planning to provide certain fees to the banks for extending the services,” Khatiwada added.
Khatiwada said many women had approached the ministry for loans. “Now we have asked for Rs 50 million from the MoF for the NWET,” she disclosed, “However, there should be a full-fledged budget in place to establish the trust again.” Unfortunately, the government has to repeat the whole process again to do that.
Similarly, Rs 5 million allocated to establish the Technology Development Fund (TDF) in the last fiscal year was also frozen. The MoI is just working on developing the guideline for TDF. “The money was frozen due to ministry´s inability to endorse a guideline in time,” Bishnu Dhakal, under secretary at the MoI said