Kathmandu. The government has announced that it will provide unsecured loans to workers going for foreign employment in the budget for the upcoming fiscal year 2083/84. Emphasizing the issue of making arrangements for going for foreign employment only after learning skills, it has been mentioned in the budget that the arrangement of unsecured loans will be made. The issue of arranging unsecured loans and payment of the loan in installments by the employer has been strongly mentioned in the budget.
‘We will make foreign employment dignified, transparent and automated by making arrangements for unsecured loans and payment in installments by the employer,’ the budget statement states. The Ministry of Youth, Labor and Employment (then Ministry of Labor, Employment and Social Security) had earlier included the issue of unsecured loans for the first time in the budget for 2081/82. After that, the issue was included only in roundabout language in the current fiscal year 2082/83.
The provision of unsecured loans for workers going for foreign employment has been mentioned since previous years. However, the provision has not been implemented yet. The ministry had studied and prepared the working procedure. However, due to confusion in the implementation process, the issue did not move forward. The government has included the issue of providing unsecured loans and sending workers for foreign employment in the upcoming fiscal year as well.
This program, which was also included in the budget of previous years, was stuck in the working procedure as the recruitment cost could not be determined. According to the ministry’s spokesperson, Pitambar Ghimire, despite many discussions, the necessary working procedure has not been finalized. The main problem lies in the service fee charged by the manpower companies.
‘A provision was made for the bank to provide loans based on the total cost incurred when any worker goes abroad,’ said spokesperson Ghimire, ‘but since the cost varies according to the country (Gulf countries, Japan, etc.) and the nature of the recruitment, a specific limit could not be set. The procedure could not be approved as there was no basis for how much the bank would lend after the cost was not specified.
The budget mentions a provision for providing concessional loans to those going for foreign employment and for the employer to deduct the installments of the loan from the workers’ wages. However, there is also confusion about how foreign employers will pay the installments to Nepali banks. The ministry should also come up with a clear procedure on this matter. However, the procedure prepared by the ministry earlier did not mention the issue of the employer paying the installments. Spokesperson Ghimire says that more homework is still needed to implement this issue.
Such efforts have not been without precedent. When Rajendra Singh Bhandari was the Minister of Labor, a task force was formed under Ghimire’s coordination to study the issue of service fee determination. However, with the elections and the formation of the new government, that process remained incomplete.
Although the documents on this subject have been prepared in the ministry, the ministry has concluded that a high-level team including the Ministry of Finance, experts and stakeholders is needed to reach a conclusion. The Nepal Foreign Employment Entrepreneurs Association and manpower entrepreneurs have been demanding that a service fee equivalent to one to two months’ salary be set according to the country to which the workers are going.
Spokesperson Ghimire said that the ministry is holding regular discussions on this and that a concrete model should be adopted that would represent everyone. The government’s plan to provide unsecured loans to workers going for foreign employment will take shape only if an agreement is reached on the cost.
Everlasting controversy over service fee determination
The then government had set a service fee of 70,000 rupees for Gulf countries and 80,000 rupees for Malaysia, effective from 2060 Baisakh 24 and 2072 Jestha 26, the then Minister of State for Labor Tek Bahadur Gurung had decided that ‘free visa free ticket’ and service fee of only 10,000 rupees would be allowed.
Manpower entrepreneurs have been protesting since 2072 BS, demanding that the service fee of Rs 10,000 be removed and a suitable fee be set. Hari Bahadur Pandey, chairman of the Nepal Foreign Employment Entrepreneurs’ Unity Committee, said that the service fee of Rs 10,000 should be abolished and a minimum of 2 months’ salary should be provided as service fee and that the worker should be allowed to travel by himself if the employer company does not provide air tickets.
He said that if a proper system of service fees is implemented, workers will not be cheated, middlemen will be displaced and the revenue received by the state will also increase significantly. He claims that entrepreneurs are forced to take lakhs of rupees from workers because the service fee is not reasonable. “We have been saying since 2072 BS that we cannot send workers at a service fee of Rs 10,000. We have challenged the state since the state did not listen,” Pandey said.
Former president of the Nepal Foreign Employment Entrepreneurs Association, Rajendra Singh Bhandari, said that the existing problems seen in this sector will not be solved unless the policy system is improved. He said that if the government makes policy reforms with appropriate fees and arranges for payment through banks, the allegations of fraud against them will also be resolved.
