April 22: Startup ecosystem enablers, mentors, investors and entrepreneurs have appealed the government to form a ‘Nepal Covid 19 Start-up Assistance Scheme’ to support the start-ups. According to stakeholders, majority of startups are on the verge of running out of their business.
A committee consisting of entrepreneurs, investors, mentors and academicians have been frequently interacting with the start-ups after the lockdown. Based on interaction and study, it has been revealed that start-ups in the early stage are under the risk of dying and established start-ups with strong market presence are expressing concerns of liquidity crunch.
The committee submitted a ‘Startup Crisis Management Appeal’ to Finance Minister Yuba Raj Khatiwada and Nepal Rastra Bank, National Planning Commission and Ministry of Industry, Commerce and Supplies on Tuesday.
The written document mentions that even in a moderate risk scenario, businesses will be compelled to lay off employees in the next 4 weeks, if any relief isn’t provided by the government. “Our request for government response in facilitating the survival of start-ups is not curry-favouring. Rather, there is a strong business case for the need to support these start-ups given how deeply the sector entrenched is for Nepal’s economy in the present and the future,” mentions the document.
The committee has requested the government to provide assistance in payroll, rent, administrative expenses, and payment to vendors. The ecosystem players have also appealed to provide immediate temporary tax relief, TDS relief, VAT relief and Social Security Fund relief until one year after lockdown ends. Also, the committee has requested for collateral fee loan of Rs 5, 00,000 to Rs 5 million for one year. To qualify as a start-up under Nepal’s Ministry of Industry 2017 Start-up Policy draft, companies should have a registered life not exceeding five years, have invested capital not more than Rs 100 million and an annual turnover not exceeding Rs 100 million in any preceding fiscal year.