Weena Pun

With a view to aiding the government in its ambitious plan to decrease the number of people below the poverty line from 23.8 percent to 18 in the next three years, the Youth and Small Entrepreneur Self-employment Fund (YSEF) plans to increase the total number of self-employed youth to 70,000 within a year.

It also plans to establish regional offices.

After a start filled with hiccups, with only around 4,200 employed under the programme in the first three years, the Fund’s website currently boasts of 14,352 self-employed youth. According to Punya Prasad Regmi, vice-chairman at the Fund, the number is slightly higher at 20,000. The Fund has already disbursed Rs 2.29 billion for self-employment. The Fund disburses at most Rs 200,000 per person through banks and financial institutions, and cooperatives. The cooperation with the latter seems to be paying off the most, as around 28,000 cooperatives are spread over 75 districts. The other reason the relationship has paid off is because the cooperatives are willing to lend money to people for small projects without any collateral, precisely the objective of the Fund.

So far 600 cooperatives are working with the Fund in 70 districts. The Fund plans to work with cooperatives in Kathmandu, Bhaktapur and Lalitpur in the coming months. Manang and Mustang, however, are still outside the list, primarily because the two districts have relatively few cooperatives. The National Cooperative Federation of Nepal (NCFN) is helping the Fund reach its target of additional 50,000 self-employed youth in the country. Consequently, the NCFN plans to spread the reach of cooperatives to all the village development committees in Nepal in the next five years. It also plans to increase the number of its shareholders from around 40,000 to 10 million in the period.

“Unless the cooperatives are strong, the ambitions of the National Planning Commission (NPC), which also aims to upgrade the country from a least developed to a developing nation by 2022, won’t be realised,” said Keshav Prasad Badal, the NCFN chairman. Neither will the target of the Fund be met.

The Fund, however, has no plans to raise the maximum amount lent to borrowers, despite reports that the amount is inadequate. Regmi believes that the amount is enough to start a small enterprise in rural areas. Economists welcome the progress of the Fund and its plans and ambitions, but they fear that until the government formulates a national strategy for the utilisation of the human resource, the Fund might fail to cater to the increasing number of youth that enter the job market every year. Currently, the number is estimated to be around 400,000 each year.

“Until the government realises that the primary source of economic growth is human resource and plans accordingly, we won’t see the 7 percent annual growth desired by the NPC,” said economist Chandra Mani Adhikary.

Published on: 17 July 2013 | The Kathmandu Post