Kathmandu: Nepali government is set to introduce a non-collateral loan system aimed at shielding migrant workers from high-interest rates. This move follows a recent announcement by the Nepal Rastra Bank (NRB), which has included provisions for non-collateral loans in its latest monetary policy. The Ministry of Labor, Employment, and Social Security (MoLESS) is spearheading the implementation process.
The new system is designed to alleviate the financial burden on young individuals seeking employment abroad, who often resort to high-interest loans to cover their overseas job expenses. Currently, a substantial portion of these workers’ earnings is used to repay these costly loans.
The budget also proposes facilitating access to loans backed by agricultural produce as collateral and promoting bank loans to foster innovation and youth entrepreneurship.
The MoLESS is particularly focused on implementing this non-collateral loan system for workers heading to Gulf countries, where a large number of Nepali workers are employed. This initiative is anticipated to greatly enhance financial stability for Nepali migrant workers and streamline their access to necessary funding for foreign employment.