The Public Accounts Committee (PAC) issued the directive on Sunday to get a clear picture on whether the current and previous governments influenced officials of the agency to issue loan to party cadres without following due procedure, Ram Krishna Yadav, chairman of the PAC, told Republica. 

 

The government of the UCPN (Maoist) had established the fund three years ago to promote entrepreneurship among jobless youths and raise their access to credit. Since its establishment, the fund has been providing collateral-free low-interest loans of up to Rs 200,000 to youths, who want to start vegetable farming at commercial level, open small dairy and agricultural industries and set-up animal husbandry units, among others.

 

The fund, which is giving preference to unemployed youths, marginalized groups such as dalits and deprived members of indigenous groups, is also providing free skills development trainings to those who seek the loan amount from the government. 

 

So far, the fund has approved loans worth Rs 1.75 billion and distributed Rs 371 million among more than 22,000 people through various commercial banks and financial institutions.

 

However, lately, it has been said the Fund is being used as an agency to distribute cash among people close to the current finance minister, Barsha Man Pun. It is also said that Babu Ram Bhattarai, who is now the prime minister, had used influence and doled out money among party members when he was the finance minister.

 

Initial investigations show that these influential members of UCPN (Maoist) had asked the fund to approve loans without following the due process, according to reliable sources of the PAC. 

 

They said two cooperatives related to Maoist leaders Shalik Ram Jamkattel and Chandra Thapa have cut corners and asked the fund to approve credit of Rs 270 million of which Rs 30 million has already been distributed.

 

"We can give details on this only after a week when the fund submits its financial report," the PAC officials said.

 

In the meantime, the UCPN (Maoist) has also claimed that CPN-UML had also misappropriated the fund´s amount when it was in power.

 

Issuing a press release Sunday, Maoist-affiliated All Nepal Trade Union Federation said the fund was coerced into reducing credit rate by one percentage point to six percent and releasing these loan amounts from tax liabilities for a year when Surendra Pandey and Bharat Mohan Adhikari were at the helm of the finance ministry. 

 

“Since finance ministers automatically assume the post of the fund´s chairman, they can very easily use influence in distribution of loan amounts,” a source of the PAC said.