Educated Youth Self-Employment Loan: Low Impact Despite Policy Push, 32% of Loans Still Unrecovered

Launched to steer educated but unemployed youths toward self-employment, the government's Educated Youth Self-Employment Loan program remains confined to a limited scale even after years of implementation. As per the latest data released by Nepal Rastra Bank, only 75 individuals have received loans under the scheme as of the end of Baisakh 2082, with a total disbursement of just NPR 36.22 million.

Of this, around NPR 11.56 million, or 32 percent, still remains unpaid. This number not only reflects the scheme’s modest reach but also raises concerns over its efficiency and repayment structure. While the program aims to motivate young people toward entrepreneurship, the number of beneficiaries and the impact of loan utilization remain far from promising.

According to the data, Class A banks have taken the lead in implementing the scheme, disbursing NPR 30.32 million to 66 borrowers. Class B banks have issued NPR 5.9 million to 9 borrowers. Notably, Class C and D financial institutions have not issued a single loan under this category, indicating a worrying lack of outreach into rural and semi-urban regions.

“Educated” but Left Behind

Many eligible youth appear to be unaware of the program, or unable to access it due to bureaucratic hurdles. A lack of business planning skills, coupled with the absence of advisory support, means that even those who receive the loans often struggle to start or sustain their ventures. While banks claim to have simplified the process, applicants still face practical challenges on the ground.

Good Policy, Poor Execution

Experts argue that the intention behind the scheme is sound, but weak implementation and lack of systemic follow-through have undermined its effectiveness. Some youth have used the loans successfully to build their enterprises, but many report difficulties in execution, financial planning, and generating revenue. Simply announcing policies is not enough, experts say — implementation must be just as prioritized.

If the government is serious about empowering youth, more must be done. Better coordination between local governments, cooperatives, and financial institutions is essential. From awareness campaigns to technical training and loan monitoring, comprehensive reform is required to ensure these loans achieve what they were intended for.

Without structural improvements and on-the-ground support, the "Educated Youth Self-Employment Loan" risks becoming yet another well-intended but ineffective policy — one that sounds good on paper but fails to deliver results in practice.