The Ministry of Labour, Employment, and Social Security has prepared a draft guideline to provide collateral-free loans to Nepali migrant workers going abroad for employment.
The ministry has finalized the “Procedure for Providing Collateral-Free Loans to Nepali Workers Going for Foreign Employment, 2082”, which is now in its final stages, according to ministry officials. The drafting committee is led by Joint Secretary Jeevalal Bhushal, and includes representatives from the Nepal Rastra Bank, commercial banks, and the Ministries of Finance and Law.
Participants in recent discussions included Dev Kumar Rai from the Ministry of Finance and Saurabh Pokhrel from Nepal Rastra Bank. “We are holding the final round of talks with senior NRB officials,” said Bhushal. “Once the guideline is passed, the NRB will instruct commercial banks to implement it. Thus, NRB’s role will be crucial.”
The ministry plans to forward the draft to the Ministries of Finance and Law for approval once it is finalized. If they agree, it could be taken to the Cabinet for endorsement, though the ministry also has authority to approve such procedures independently.
According to ministry sources, the guideline proposes offering a minimum of NPR 200,000 in collateral-free loans for workers going to Gulf countries, and up to NPR 500,000 for those heading to Europe.
A stakeholder meeting on Sunday, chaired by Labour Minister Sharatsingh Bhandari, discussed the draft in detail. The minister emphasized that many workers are forced to borrow from predatory “meter interest” lenders at high rates, and that this procedure would free them from such exploitation by providing easy and secure access to institutional credit. “Once workers earn money abroad and return, they can repay the loan while still receiving state-supported social security and insurance benefits,” said Bhandari. “The key objective is to prevent bank defaults, ensure access to credit, and protect workers from loan sharks.”
In the discussion, NRB representative Saurabh Pokhrel expressed commitment to helping finalize the draft, while suggesting that loan recovery mechanisms be clarified further. Similarly, Anil Sharma, Executive Director of the Nepal Bankers’ Association, welcomed the initiative and pledged banks’ full cooperation for implementation.
Dr. Krishnahari Pushkar, Secretary at the Labour Ministry, stressed the urgency of passing the long-delayed procedure, noting the importance of incorporating clear loan repayment mechanisms based on past experience.
According to Joint Secretary Bhushal, Nepal has currently opened institutional foreign employment channels in 111 countries. However, many Nepalis still migrate illegally to countries not officially recognized by the government, making it difficult to track accurate numbers.
The Economic Survey 2081/82, published by the Ministry of Finance, states that 1,670 manpower agencies have been licensed to send workers abroad. The UAE remains the top destination, as it was in the previous fiscal year.
By the end of Falgun 2081, a total of 6,461,019 new labor approvals had been issued, with 93.3% male and 6.7% female recipients. Specifically, 317,063 workers (275,743 men and 41,320 women) received new labor approvals during that time.
Including renewals, the total number of labor approvals in the current fiscal year had reached 534,471 by the end of Falgun, with 88.7% male and 11.3% female.
Under the EPS system, 7,509 Nepali workers migrated to South Korea in the current fiscal year, compared to 10,855 in fiscal year 2080/81.
