Enterprising youth to get concessional loans

The ministry of labour signed an MoU with the six financial institutions in the country on a credit guarantee scheme (CGS) to provide concessional loans to unemployed youth, who want to start a career in en­trepreneurship.

Launching the scheme on Wednesday, Labour Minister Dorji Wangdi said the scheme would address issues of financial access constrains underlined in the economic development

policy. He said it would not only provide self-employ­ment, but also general em­ployment in the long run. Besides, it was also a perfect model for public-private partnership.

The scheme will provide a loan up to Nu 1 million to youth who have completed basic entrepreneurship course (BEC) and compre­hensive entrepreneurship course (CEC) facilitated by the labour ministry.

Under the scheme, BEC graduates will be given 100 percent collateral-free loans while CEC graduates will be provided 85 percent financ­ing. The scheme features concessional interest of 10 percent on term loans and 12 percent on working capi­tal.

If the business fails, the government and financial institutions will share the loss at a ratio of 60:40.

The entrepreneurship courses graduates can apply for the loan within two years of graduation or until they attain 35 years of age. Loans will be given for manufac­turing- and service-related products.

In order to avail them­selves of the loan, the gradu­ates have to be between 18 and 35 years old and should have some form of vocation­al or technical skills. Howev­er, applicants without skills could also get the loan after undergoing the entrepre­neurship courses.

Since the transfer of the entrepreneurship pro­gramme from the economic affairs ministry in January 2009, the labour ministry has trained eight batches of youth in one and a half years.

The first and second batches of graduates were provided financial assis­tance as grants with support from UNDP.

Till date, the ministry has trained some 254 youth un­der three entrepreneurship training programmes, out of which 87 were trained under the BEC programme, 74 in CEC and 93 in the en­trepreneurial skills develop­ment. Out of the 254 gradu­ates, 47 have been provided financial help to start their businesses.

The labour ministry aims to support 400 small busi­ness establishments within the 10th plan period. To­wards that end, the ministry plans to train 50 educated unemployed youth under the CEC programme and 50 skilled unemployed youth in BEC in every quarter of a year.

One Response to “Enterprising youth to get concessional loans”

1. pauld says:

   January 24, 2011 at 4:34 pm

   from the bottom of the heart hats off to all the minds who came up with such a innovation. hopefully our youths recognize the prerogative from higher conscious state. And settle with the expectations.
   i want to know whether the entrepreneurship course is available to undergoing students(degree) of technical disciplines.

   Reply