Loans advanced by member institutions up to Rs. 10 million for the promotion of service sectors and industries shall be guaranteed by the Fund under this scheme. For the loans above Rs. 10 million up to 30 million the member institutions have to obtain prior approval of the Fund before disbursing.
The premium rate is fixed at 0.6% per annum out of which only 50% of premium amount (i.e 0.30% of the guaranteed amount) shall be paid by the member institution at the rate of 0.15% each on the outstanding loan of Poush end and Asadh end respectively. Remaining 50% of premium amount (i.e 0.30% of the guaranteed amount) will be received as subsidy from the Government of Nepal.
The maximum tenure to lodge claim by member institutions with the Fund is within two years from the due date of payment of Loan.
The compensation rate on guaranteed loan up to Rs 5 million is 80% of the outstanding balance whereas the compensation rate on the guaranteed loan above Rs 5 million up to Rs 20 million is 70% of the outstanding balance.