Tarai unrest impacts cottage, small enterprises

Kathmandu, Aug. 1

The Federation of Nepal Cottage and Small Industries (FNCSI) said that cottage and small industries, which largely depend on limited capital, local markets and daily business transactions, are the hardest hit by unrest, shutdowns, vandalism and disruptions to market activities.

Such situations weaken the confidence of entrepreneurs and adversely affect production and supply chains, it said in a statement on Saturday.

It has expressed serious concern over the recent tense situation, social unrest and violent incidents that began in Dewanganj–Kaptanganj of Sunsari district and spread over several other districts across the Tarai.

Paying tribute to those who lost their lives in incidents, it urged all concerned parties to exercise restraint in order to safeguard peace, social harmony and economic activities.

The FNCSI noted that Nepal is a country with a shared identity built on diverse ethnic communities, languages, religions and cultures, and that social harmony, tolerance and mutual trust are the foundations of national stability and economic prosperity.

It warned that such incidents have direct and long-term negative impacts on cottage and small industries, local production, trade, tourism, employment and the overall economy.

It called on all stakeholders to exercise restraint while preserving social and religious harmony.

Through the statement, the FNCSI also urged the Government of Nepal, local authorities and security agencies to ensure effective law and order in the affected areas, guarantee the safety of businesses and the lives and property of the public, and immediately create an environment in which economic activities can continue without disruption.

Published in The Rising Nepal on 2 August 2026. 

Bardaghat SME Village seen as growth engine

Kathmandu, Feb. 26

Investors have expressed confidence that the Bardaghat SME Village will contribute to the economic development of Nawalparasi.

Speaking at an interaction programme organised by the Confederation of Nepalese Industries (CNI), with support from the Bardaghat Chamber of Commerce and Industry (BCCI), Bardaghat Industry and Trade Association, and the CNI Youth Entrepreneurs Forum in Bardadhat on Thursday, they said it would help in creating employment and using local raw materials.

Acting President of the CNI, Nirvana Chaudhary, said the organisation has remained committed to promoting entrepreneurship and that the Bardaghat SME Village should be developed as a pilot project and model industrial village. He stated that the initiative could help promote small and medium-sized enterprises in the area.

Chaudhary also noted that industrial villages are necessary as a significant portion of investment is required for land acquisition when establishing industries. He said the presence of large industries and road infrastructure in Nawalparasi has created conditions favourable for the development of small and medium enterprises.

Former President of the Federation of Nepalese Chambers of Commerce and Industry, Shekhar Golchha, noted that unemployment remains a major issue in Nepal and that many young people have gone abroad for work, adding that industrial development is necessary to create jobs and support economic growth.

He said industrial villages could support industrialisation and added that the Golchha Group is positive about bringing industries to the area.

Likewise, Former CNI President Vishnu Kumar Agarwal said the contribution of manufacturing industries to gross domestic product has declined to about five per cent. He said efforts are needed to increase the sector’s share and referred to industrial parks in Bangladesh and India as examples. He also said there are plans to expand the MAW Skill Academy to the area, which already operates in Kathmandu and Janakpur.

CNI Vice-President Rohit Gupta said he was able to establish the Kajaria Tiles industry in Bardaghat within a year due to local support. He stressed the need to develop the SME Village alongside large industries.

President of the BCCI, Lekh Nath Neupane, said industrial villages are essential to promote small industries. Similarly, Bardaghat Industry and Trade Association Vice-President Lilahari Paudel said the area’s proximity to the Indian border facilitates the import of raw materials and export of finished goods.

CNI Lumbini Province President Ejaz Alam said the area’s infrastructure and proximity to Rupandehi make it suitable for industrial expansion.

Similarly, CEO of Nabil Bank, Manoj Gyawali, said the presence of more than 250 financial institutions has improved access to finance and that the bank has been supporting entrepreneurship and skills development.

Chair of the CNI Youth Entrepreneurs Forum Lumbini, Rajan Kasaju, said young people are starting businesses in Nepal and stressed the need for policies to encourage entrepreneurship and reduce outward migration.

 Published in The Rising Nepal daily on 27 February 2026.     

Nabil, NiB-GA forge partnership

Kathmandu, Nov. 27

Nabil Bank and Nepal in Business – Growth Advisors (NiB-GA) have entered into a strategic partnership to provide enhanced support for small and medium-sized enterprises (SMEs) in Nepal.

Manoj Kumar Gyawali, CEO of Nabil Bank, and Ratish Basnyat, Team Leader of the NiB-GA Programme, signed the agreement on Thursday.

Under this programme, the Foreign, Commonwealth and Development Office (FCDO), through NiB-GA, will award and manage £4.5 million (about Rs. 846 million) in grants to 40 SMEs operating within NiB’s key sectors and geographical focus areas.

The grants aim to help participating enterprises scale their operations, improve efficiency, and strengthen their export readiness, Nabil Bank informed in a statement.

Speaking at the signing event, Gyawali said that this initiative will help boost the confidence of SME entrepreneurs in the current context. “As the project is designed to work closely with both entrepreneurs and policymakers to support the growth and development of SMEs, Nabil Bank can facilitate partner organisations with SME loans and channel financing,” he said.

Similarly, NiB-GA Team Leader Basnyat expressed his appreciation to the bank for providing grant-management services that ensure systematic and transparent fund disbursement to partner organisations in line with project requirements. According to him, this model could be beneficial for other projects of a similar nature and could even be adopted by the government to support efficient capital expenditure.

As part of this collaboration, Nabil Bank will serve as the financial partner responsible for managing the disbursement of grants. The bank will ensure secure, transparent, and efficient financial-management systems for all partner organisations, reinforcing accountability and smooth programme implementation.

The NiB-GA Programme aims to enhance the productivity and competitiveness of SMEs by fostering sustainable and productive employment through targeted grants and technical assistance. The NiB is a five-year initiative funded by the UK International Development and implemented by DAI Global UK.

Published in The Rising Nepal daily on 28 November 2025.

Nepal Chamber, Korean Bridge International ink MoU

Kathmandu, Aug. 19

Agriculture, Herbs and Forestry Committee of the Nepal Chamber of Commerce (NCC) and South Korea’s Bridge International have signed a Memorandum of Understanding (MoU) to cooperate in the expansion of agribusiness and the development of small and medium-sized enterprises.

At a programme held in Kathmandu on Tuesday, Chairperson of the Committee, Krishna Man Shrestha, and CEO of Bridge International, Jinsol Wang, signed the MoU. The agreement includes provisions for both parties to exchange information related to agriculture and entrepreneurship, and to conduct joint studies on Nepal’s market conditions and business potential.

According to the agreement, Bridge International will provide technical support to Nepal’s innovation-driven businesses from the central to the local level.

The signatories of the MoU also agreed to organise exhibitions and promotional events for products created by Nepali and Korean start-ups, create business networking opportunities, and facilitate mentorship and skills exchange. It is believed that joint workshops, training, and knowledge-sharing between the two institutions will benefit innovation-focused entrepreneurs in both countries, the NCC informed in a statement.

Likewise, the agreement outlines plans to promote business by enabling entrepreneurs and young innovators from both nations to visit each other’s countries, explore potential opportunities in each other’s markets, and develop new prospects.

"In addition, the NCC will collect data on youths who have returned from Korea after acquiring skills, and support them in enhancing their entrepreneurial capacity and expanding their business networks," read the statement.

The NCC expressed its belief that this cooperation agreement, prioritising agribusiness, herbs and forestry, and the development of small and medium-sized enterprises, will strengthen the entrepreneurial environment in Nepal.

Published in The Rising Nepal daily on 20 August 2025. 

MSEs hesitate to join SSF scheme

Kathmandu, July 24

Seven years since Nepal implemented the contribution-based social security scheme for the employees, the question remains on how to better attract Nepali businesses to the Social Security Fund (SSF).

In particular, micro and small enterprises (MSEs), which according to the Economic Census of 2018 constitute 99.5 per cent of total 923,356 in operation then, are lagging in this regard.

While the law has mandatory provisions for formal schemes, MSEs remain apprehensive whether they could continue with SSF in a sustainable manner. The take-up across informal sector schemes, and the self-employed schemes also remain sluggish.

MSEs contribute about 22 per cent to the national economy and employ about 1.8 million people.

Chairperson of Cottage and Small Industry Committee at the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), Narendra Kumar Khadka, said that in the current economic situation and stringent policies, it is not easy for the employers to ensure the sustainability of contribution-based social security.

"The micro and small enterprises are between compulsion and understanding in terms of executing the social security provisions. We need to find a middle ground to support the employers and facilitate the employees," he said.

According to him, the FNCCI is working on it through a committee led by the Ministry of Labour, Employment and Social Security, Social Security Fund (MoLESS) to implement the National Action Plan on Formalization with technical assistance from the International Labour Organization (ILO) which is promoting the registration of MSEs into SSF.

The Contribution-Based Social Security Act 2017 envisions all business establishments – both in formal and informal sectors – as well as non-profit sector institutions, and individuals including those in foreign employment to be included in the system.

According to the law, the employee contributes 11 per cent and the employer puts up 20 percent making it 31 per cent of the basic salary for formal schemes. The informal sector worker schemes have 11 per cent of the workers and 9.37 per cent from the local government while self-employed schemes see the full 31 per cent contributed from income.

The benefits on offer include medical treatment and health benefit, and various protections like maternity, accident, incapacity, old age, dependent family and unemployment. Such schemes ensure protection for both employers and workers, enhancing productivity and promoting employment security.

However, in case of failure to deposit the contribution within 15 days after the end of each month may result in a 10 per cent interest charge on the overdue amount. However, there is a clause in the law whereby the employer can register an application to the SSF to deposit the money within 30 days if there are plausible reasons that the situation was beyond their control.

If the non-compliance continued beyond the period agreed by the SSF, it can write to the concerned authorities to freeze the bank account, moveable and immoveable assets of the concerned individuals or institutions, suspend or stop the rebate facility entitled by law and suspend their permit or license, and freeze the passport of the persons concerned.

These provisions have forced the MSMEs, many of which lack business sustainability plan, think twice before joining the SSF.

The SSF has estimates that out of 21,031 economic establishments registered with the Fund, 3,000 (about 14 per cent) are MSEs. Its collections had reached Rs. 86.93 billion in contribution till Wednesday 23 July 2025 and paid Rs. 15.79 billion against the claims for medical and health treatment, accident and disability, dependent family protection and retirement facility.

 

MSEs' possibility of joining SSF

A sample survey on micro and small enterprise contribution capacity has now completed by the MoLESS led the committee in charge of implementing the national action plan on formalization.

On the demand side, it was found that nearly half of the non-contributing enterprises demonstrated good financial health, suggesting the potential to participate in SSF. Also, many MSEs lacked proper bookkeeping, with some even lacking bank accounts in the name of the enterprise, which calls for financial literacy and business management support. Interestingly, it was found that there was a segment of unregistered businesses that could join SSF, and in cases unaware of the different formal, informal sector and self-employed schemes on offer.

On the supply side, a need to consider subsidies, financed through tax mechanisms or redistribution though carefully designed to ensure sustainability and avoid creating disincentives for MSE formalisation or business growth was found.

Spokesperson for the SSF, Krishna Adhikari, has made a primary assessment that there is a possibility to include all the MCSEs in the social security scheme.

"We found that joining the SSF may not be a financial burden to the enterprises since it entails other various benefits, relieves the employers from the potential extra expenses on health and other areas while employees could be more motivated," he said.

Yet, there is a need for intensive campaign for information, awareness and education to micro, and small entrepreneurs to attract them to the scheme.

Meanwhile, the FNCCI together with MoLESS, SSF and other members of the committee with technical assistance from the ILO, and the European Union United Nations Empowered Women Prosperous Nepal programme has begun implementing a targeted awareness programme based on the findings.

In Nepal, micro enterprises are businesses with fixed assets of up to Rs. 2 million and employ up to nine persons with direct involvement of the investor. Small enterprises are the businesses with fixed assets ranging between Rs. 2 million and Rs. 50 million employing between 10 and 49 persons. Similarly, medium enterprises have fixed assets between Rs. 50 million and Rs. 150 million and employ between 50 and 249 persons. These investments are excluding the land and buildings. 

Published in The Rising Nepal daily on 25 July 2025.

Entrepreneurs stress promotion of CSIs

Kathmandu, June 8

Stakeholders in the Cottage and Small Industries (CSIs) have stressed the need for promoting micro, cottage, and small industries.

They made these remarks during the 35^th anniversary celebration organised at the secretariat of the Federation of Nepalese Cottage and Small Industries (FNCSI) in Kathmandu on Sunday.

The FNCSI is the umbrella organisation of micro, cottage, and small-scale entrepreneurs. The CSIs provide self-employment and local job opportunities to hundreds of thousands of citizens, as well as promote domestic production.

FNCSI President Umesh Prasad Singh said that micro, cottage, and small industries are a reflection of Nepal’s real economic structure and potential. He stated that it was impossible to envision a sustainable, inclusive, and self-reliant economy without such industries.

"With the right policy, financial, and technological support from the state, these industries possess the potential to make Nepal economically self-sufficient," said Singh.

He drew attention to the fact that these industries, which support import substitution and export promotion, also contribute to the economic development in the rural and remote areas. Since small industries can be established across villages, they also help reduce regional disparities.

According to Singh, such industries utilise local resources and skills, and empower women, youth, and marginalised communities. Compared to large industries, they require less investment, involve lower risk, and offer greater flexibility.

“In a country like Nepal, there are geographical, capital, and infrastructure constraints in operating large industries. Micro, cottage, and small industries can truly serve as the backbone of economic dynamism in our country,” he added.

He also emphasised the need for proper provisions in the future to ensure continuity to concessional loans and refinancing schemes, as the upcoming fiscal year’s budget appears silent on such support measures, which were provided in the past.

Former FNCSI President Shyam Giri said that while micro, cottage, and small industries are often referred to as the engine of the economy, this has not been evident in practice.

He said that the FNCSI was established to advocate for the rights and interests of micro, cottage, and small entrepreneurs and has evolved into a national umbrella organisation representing such enterprises in Nepal.

Published in The Rising Nepal daily on 9 June 2025. 

‘Small investment in IT sector can yield significant results’

Kathmandu, Jan. 30

Entrepreneurs have said that Nepal could generate over Rs. 1 trillion annually if it focuses on producing skilled IT professionals.

Speaking at the Nepal Startup and SME Conference, organised by the Nepali Congress in Lalitpur on Thursday, they asserted that even a small investment in the Information Technology (IT) sector could yield significant results.

Speaking at a panel discussion on 'Entrepreneurship and workforce development: Preparing for the IT sector' organised on the second day of the conference, Sulabh Budhathoki, Head of Innovative Nepal Group, emphasised the vast opportunities in Nepal’s IT sector and the need for investment in workforce development. He stated that if Nepal could produce skilled manpower as per industry demand, the country could export IT services worth over Rs. 1 trillion annually.

"We are currently working to develop skilled human resources. We are lobbying to ensure that IT education is easily accessible in every IT college without quota restrictions," he said.

Budhathoki further said that IT has already surpassed tourism as the world’s highest revenue-generating sector so the government must introduce open policies to support startups. Over Rs. 125 billion has already been invested in the IT sector in Nepal. Practical education should be promoted, and students completing Grades 11 and 12 should have a clear pathway to IT education, said Budhathoki.

He also stressed the importance of adopting a positive mindset towards challenges. According to him, opportunities arise from challenges. If young people can think critically, embrace challenges, and turn them into opportunities, launching a startup is not as difficult as it seems.

Professor Dr. Mahananda Chalise, Dean of Tribhuvan University, said that there is a need for the government to prioritise technical education along with business knowledge. Meanwhile, he also stated that TU is continuously working in this direction.

"The government introduces policies, but they do not address the challenges of integrating students into technical education. It is essential to design curricula that incorporate technical and vocational skills and ensure their practical implementation," he said.

Likewise, Bibhushan Bista, founder of Young Innovation, pointed out that if the government formulates policies supporting the IT sector, Nepal could produce five times more skilled professionals than at present, significantly increasing service exports.

According to him, problem-solving skills and a capable workforce are crucial across all industries. "Classroom learning and practical application are different. Real learning happens when knowledge is implemented in the field," he said.

"Entrepreneurship is a mindset. The difference between an entrepreneur and an ordinary person is that while an ordinary person sees a problem, an entrepreneur sees an opportunity and works to solve it," said Bista.

However, unless an entrepreneur executes an idea, its value remains zero. Entrepreneurship must be integrated into education, but starting a business should not be limited to those who formally study entrepreneurship, he added.

Karvika Thapa, CEO of Kimbu Tech, stressed that selecting a field of personal interest is key to succeeding in a startup.

"Developing skills is essential to becoming an entrepreneur. One should focus on areas where they have expertise and put in the effort accordingly," she said.

 Published in The Rising Nepal daily on 31 January 2025.  

NBA joins SME Finance Forum

Kathmandu, Nov. 12

Nepal Bankers’ Association (NBA), an Umbrella Organisation of all 'A' Class Commercial Banks in the country, has joined the SME Finance Forum as the global membership network’s latest member.

The 300+ members/affiliates of the Forum are SME financing experts operating in 190 countries who share the common goal of expanding access to finance to small businesses worldwide through knowledge exchange and innovation, the Forum said in a statement on Monday.

“SME Finance Forum proudly welcomes the global learning platform. It is with great pleasure I welcome NBA to SME Finance Forum which is in line with our strategy to help emerging markets promoting more SME financing for impact,” said Qamar Saleem, Head of SME Finance Forum.

The NBA was established to foster collaboration and coordination among commercial banks in Nepal. NBA’s goal is to promote fair competition, maintain uniform banking policies, and adopt innovative technologies to enhance the effectiveness and efficiency of the banking sector, according to the statement.

“We believe that joining the prestigious SME Finance Forum would significantly benefit the banking sector, especially as both the regulator and banks in Nepal are actively focused on enhancing financing for small and medium-sized enterprises (SMEs),” said Sunil KC, President of NBA.

The SME Finance Forum, backed by G20 and IFC/World Bank, is a network comprised of SME focused institutions providing and enabling finance and services - banks, non-bank financial institutions, fintech, payment platforms, development institutions, credit guarantee companies, insurers, investment funds, supply chain linked players, banking and SME associations, policy advocates, regulators, academia, consulting houses, knowledge aggregators.

Published in The Rising Nepal daily on 13 November 2024.  

Govt shall promote job-creating cottage, small industries: Minister Paudel

Kathmandu, July 31

Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has said that the government has a clear policy to promote cottage and small industries as an important means of creating a large number of jobs and self-employment.

Speaking to the delegation of the Federation of Nepalese Cottage and Small Industry (FNCSI) at the Ministry of Finance, he expressed his commitment to pay attention to the reforms in the laws, rules and guidelines, and said that the government would do the needful to support its growth.

The FNCSI delegation was led by its President, Umesh Prasad Singh.

Stating that the government was working with the aim of increasing the confidence and morale of the private sector, DPM Paudel said, "Our effort is to create a situation where you can engage in your profession, business and production."

Minister Paudel also asked the members of the delegation to suggest the reforms in the laws, especially the Industrial Enterprise Act. He also said that the government was positive to organise international exhibitions and operate export house to facilitate the export of the products of cottage and small entrepreneurs.

Singh said that its impact on micro, cottage and small industries would affect the entire economy of the country, create challenges in job creation, reduce the country's revenue and directly affect the repayment of the loan and interest by the businesspeople.

Since the small entrepreneurs are still facing problems in repayment of the loans, Singh urged the DPM Paudel to continue the provisions of the subsidised loan and refinancing that the government offered to the small and women entrepreneurs.

He drew attention of the DPM to the need for the promotion programmes of micro, cottage, small and women entrepreneurs. "Their morale has eroded due to multiple crises like COVID-19 pandemic, so there is a need to finalise the Industrial and Investment Promotion Fund and operate it," said Singh while also pointing to the need to establish the export house at the earliest.

According to him, there is a need to change the trend to purchase the foreign goods even though the same product is produced in Nepal. 

Published in The Rising Nepal daily on 1 August 2024.        

NPEA, UNCDF launch Agora for entrepreneurs

 Lumbini, Nov. 11

Nepal Private Equity Association (NPEA), with the support of the United Nations Capital Development Fund (UNCDF), has announced the launch of “Agora” - a web platform connecting entrepreneurs in emerging and frontier markets with investors and experts, fostering collaboration and driving economic growth.

NPEA will leverage the Agora platform to advance the association’s mission of promoting access to finance for Nepalese small and medium-sized enterprises in support of innovation, job creation and entrepreneurship, read the joint statement issued by the NPEA and UNCDF.

The announcement made on Friday in Kathmandu will commence a call-to-action among NPEA’s membership, which includes investment firms, fund managers and financial services providers, to leverage the Agora platform in advancing the strategic objectives of the Association.

NPEA and UNCDF had agreed on jointly supporting the launch of Agora in July prior to the platform becoming live in October.

“Agora will complement our deal sharing platform and provide access to our entrepreneurs and investors to a much wider perspective. As Nepal Private Equity Association strives to enhance the alternative investment ecosystem in Nepal and partnerships like this help expedite the innovation,” said Siddhant Raj Pandey, Chairman of NPEA.

Likewise, Xavier Michon, Deputy Executive Secretary of UNCDF said that Agora is a global public good that can be leveraged to provide the best total service to the Nepali enterprise ecosystem, whether they are SMEs are larger in size,

According to him, Agora will bridge the information gap that prevents investment finance from reaching promising projects in the world’s emerging and frontier economies. By bridging this gap, Agora will help deliver critical lifelines of capital to the businesses, entrepreneurs, and communities in Nepal that have been underserved by the global financial architecture.

 Published in The Rising Nepal on 12 November 2023.

Cottage, small industries to be exempted of taxes

Kathmandu, Feb. 14

Prime Minister Puspa Kamal Dahal Prachanda said on Tuesday that cottage and small industries that have potential for growth would be freed from all taxes for a certain period, and special programme would be launched to enhance their capital, technology and access to finance and market.

Addressing the inaugural programme of the 16^th International Industry Trade Fair and Cottage Industry Festival and 6^th Organic Agriculture Exhibition 2023 that kicked off at the Bhrikutimandap Exhibition Centre in the Capital, he pledged to introduce special programmes with redefining the subsidised loans provided to the cottage and small industries in the manufacturing sector to encourage them.

The Prime Minister also said that the attention of the government had been drawn to the complicated system of submitting documents and revenue from ward of the local body to the federal government as well as to the Company Registrar's Office for the registration and renewal of the cottage and small industries. "It has a negative impact on the creation of the business-friendly environment. The government will soon find a solution to it," he informed.

In the past several years, the government has announced to establish micro-enterprise village, cottage and small industry village at the local level but there has been no progress. According to PM Prachanda, arrangements will be made for the establishment and operation of such industrial village by the federal government. Grant would be provided to the local governments for the operation of such facilities.

Acknowledging that the policies and programmes of the three levels of the government failed to compliment each other in terms of building a positive industrial environment in the country, the Prime Minister pledged to formulate progressive industrial policy in coordination with all of them.

Meanwhile, he also said that the concessional loans for women, youth and agricultural entrepreneurs will be made more effective. Likewise, for the promotion of production and consumption of indigenous goods, the Prime Minister's Office will form a task force with the participation of the private sector for the immediate implementation of Prime Minister Domestic Product Production and Consumption Promotion Programme.

PM Prachanda further said that agricultural-based industries could be the most viable business for Nepal however, there is a need to produce agricultural products that are original and linked to our culture and tradition.

President of Federation of Nepalese Cottage and Small Industries (FNCSI), Umesh Prasad Singh, said that the entrepreneurs are on the verge of bankruptcy due to the acute shortage of liquidity in the recent past and exorbitant bank interest rates.

"The cottage and small entrepreneurs neither have the facility to get refinancing nor ability to pay the interest in the pretext of decreasing production and business and increasing cost and interest rates," he said.

Singh demanded to continue with the concessional loans for women, youth and agriculture entrepreneurs and make it more effective.

Likewise, Minister for Tourism, Industry and Cooperatives of Bagmati Province, Dambar Tamang, stressed on harnessing technology to expand market, and promote Nepali products in the international markets.

According to him, cottage industries also help to empower women with skill development, application and promotion.

"We need to promote our original products, that carry our culture, tradition and use local resources globally. Entrepreneurs should pay attention to the branding of their products," said Minister Tamang.

According to the FNCSI, there about 246,000 cottage and small industries in operation across the country. This sector has total investment of Rs. 353 billion and provided employment to 2.46 million people.

The expo features various products ranging from agriculture, garment, food, natural fibre, technology, spices and pickles to leather goods.

The fair has come back after a pause for three years in the past due to the COVID-19 pandemic. It will run for five days till 18 February. 

Published in The Rising Nepal daily on 15 February 2023.

Conference on SMEs on Jan. 23

 Kathmandu, Jan. 21

Federation of Nepalese Chambers of Commerce and Industry (FNCCI) is organising a conference on Small and Medium Enterprises (SMEs) in Lalitpur on January 23. Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel and Minister of Industry, Commerce and Supplies Damodar Bhandari will address the summit to be hosted for the first time by the business body in the country.

The programme is being organised with the aim of supporting the development, expansion and promotion of micro, cottage, small and medium enterprises (MCSMEs) including women entrepreneurs. The one-day conference would be developed as a flagship event of this sector, said D. B. Basnet, Chairperson of Cottage and Small Industry Committee of the FNCCI.

According to a statement issued by the FNCCI, during the conference, separate working papers will be presented and discussed on topics such as necessary policy arrangements for this sector, access to finance, market promotion, export promotion, and the impact on the business of upgrading Nepal from the least developed country status.

MCSMEs are an important part of country’s economy. While the contribution of industrial sector to the Gross Domestic Product stands at 5.6 per cent, share of SMEs is said to be about 90 per cent. About 1.7 million people have got employment in this sector.

In the opening ceremony of the conference, President of the FNCCI, Shekhar Golcha, Senior Vice-President Chandra Prasad Dhakal, Industry Secretary Dr. Toya Narayan Gyawali, and representatives from UNICEF, International Finance Corporation and International Labour Organization will share their ideas about this sector.

Similarly, the technical first session of the conference will be about business relations between large and small industries, the second session on access to finance while the third session will be a group discussion on commodity marketing, export, upgradation from the LDC and young entrepreneurship.

The conference will also discuss the efforts made for the development and promotion of the MSME sector in foreign countries. Information about the standards, documents and procedural matters required for access to finance will also be talked about.

It is expected that the participants will get information about the policies, laws, rules and procedures made to promote the MSME industry from the conference, and it will be helpful in identifying the problems faced by this sector and taking initiatives to solve the problems by the relevant agencies.

The programme is being organised under the leadership of the Cottage and Small Industries Committee of the FNCCI and Women Entrepreneurs Development Committee of the FNCCI. 

Published in The Rising Nepal daily on 22 January 2023.   

Process to set up turmeric processing centre starts in Pyuthan

Kathmandu, Dec. 9

A turmeric processing centre is being established in Pyuthan district with the grant assistance of Human Security Project (GGP) of the Japanese government.

The Rs. 10 million project will support the provision of agriculture equipment and a processing centre for the production, processing and commercialisation of turmeric. Ambassador of Japan to Nepal, Kikuta Yutaka, and President of Volunteer Nepal National Group (Vol Nepal), Shiva Rimal, signed the grant contract at a programme organised at the embassy in Kathmandu.

Currently, more turmeric is imported than is produced domestically. Local turmeric farmers are not able to earn much profit due to the lack of domestic work centres to commercialise the product, said the embassy in a statement.

"Our staff visited the site at Pyuthan Municipality-8 to see how turmeric is grown there. Turmeric is produced almost without the use of pesticides. I am hopeful that the project will empower the local community," said Ambassador Kikuta.

He said that the introduction of agricultural machinery will increase production and the processing centre, when established, will enable local people to process turmeric, from cleaning to packaging.

Likewise, Rimal said that the project will help in connecting communities and creating opportunities for them.

According to him, Pyuthan district is one of the turmeric production zones and the project could be a benchmark for further development in the area.

Pyuthan and neighbouring districts produce turmeric in a good amount. Turmeric worth Rs. 270 million is imported to Nepal in a year. "We want to promote its production because it can be produced in marginal land and subsistence level farming will be upgraded to commercial agriculture," said Rimal.

He also said that in a laboratory test conducted in Germany, cancer healing properties were found in turmeric produced in Pyuthan.

The processing centre will be operated by the local cooperatives. 

 Published in The Rising Nepal daily on 10 December 2022.   

'Diversity credits for better financial access'

 Kathmandu, June 1

Experts of the banks and financial markets said that a reform to develop a moveable asset finance market will help promote credit diversification for financial institutions while increasing access to finance for Nepali firms. 

"A developed movable asset finance market promotes financial deepening, reduces the risk and cost of credit and increases overall access to credit for micro, small and medium enterprises (MSMEs)," Resident Representative of International Finance Corporation (IFC), in Nepal, Babacar S. Faye said at a workshop on 'Secured transactions reform and movable asset finance', jointly organised by the IFC and Confederation of Banks and Financial Institutions Nepal (CBFIN) in the capital the other day.

In the more advanced markets, movable assets are the primary type of collateral that firms can used to obtain bank financing.

At present, the share of commercial lending involving movable assets in Nepal is estimated to be below 10 percent. If movable asset finance market is developed, the share can be raised to 60 percent in the long term.

"A fully functional movable asset financing mechanism will fundamentally change the shape of financing for MSMEs, agri-business operators, traders and infrastructure companies, among others," said Pawan Kumar Golyan, President of CBFIN.

He added that it will also strengthen the competitiveness of Nepali value chains both locally and internationally and could open new business avenues for Nepali businesses in the long run.

The event was organised to help promote discourse on credit diversification and to support increased access to finance.

The private sector, particularly MSMEs, a key pillar of the economy, routinely report access to finance as one of the major constraints for growth. The credit gap for MSMEs is estimated to be around $3.6 billion.

MSMEs account for approximately 98 percent of all establishments, employing approximately 57 per cent of the workforce. Despite this contribution, MSMEs in Nepal face significant access to finance challenges due to lack of adequate real estate collateral, which is the main current basis for accessing credit in the country, read the statement.

According to Golyan, there is a need for the push for the reform on the current Secured Transactions Act to accommodate new developments in the movable asset financing area and local needs. 

Published in The Rising Nepal daily on 2 June 2022. 

1000 MSMEs getting support for business digitalisation

Kathmandu, May 28

Thulo.Com, Swiss Agency for Development and Cooperation (SDC) and the UN Capital Development Fund (UNCDF) have come together to support about 1,000 micro, small and medium enterprises (MSMEs) in Nepal to digitize their operations.

The projects will include at least 60 per cent women-owned businesses, they said in a joint statement.

"The partnership will help MSMEs digitize payments, delivery, and post-sales services in rural areas in Nepal, boosting their sales and helping them recover from the effects of the pandemic," said Surakchya Adhikari, co-founder and COO of the company.

Thulo.Com, will help MSMEs to aid from the impacts of the recent pandemic and other disasters. The company will expand operations beyond Kathmandu, focusing on MSMEs in rural and urban areas in provinces 1, Bagmati, Gandaki, and Lumbini.

MSMEs will enter new markets through the Thulo marketplace, reaching online customers, and gaining digital literacy training coupled with technical support and brand identity, and digital marketing coaching.

Likewise, Swizz ambassador to Nepal, Elisabeth Von Capeller, said that SDC aims to leverage the digital solutions and support MSMEs to gain access to the markets and networks, digitize their transactions, and eventually make way to access new sources of capital.

Similarly, UNCDF said that the project will advance the inclusiveness of the country’s digital ecosystem by fostering the digital transformation of MSMEs, which form the backbone of Nepal’s economy.

"With this project, UNCDF hopes to help Nepal become more inclusive and resilient to external shocks by accelerating COVID-19 economic recovery,” said Maria Perdomo, Regional Coordinator in Asia at UNCDF.

This UNCDF project on leveraging digital solutions for MSMEs is embedded into UNCDF’s Leaving No One Behind in the Digital Era Strategy for Nepal, launched in 2021. In addition to engaging with Thulo, UNCDF will also be working with Nepal’s MSME federations and associations, as well as the South Asian Association for Regional Cooperation (SAARC) Business Association of Home-Based Workers (SABAH) Nepal.

Published in The Rising Nepal daily on 29 May 2022.  

FNCCI and Daraz announce zero fee for SMEs for a year

Kathmandu, Dec. 9

In a bid to make it easier for Small and Medium Enterprises (SMEs) to sell their product to national and international customers, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has signed an agreement with online marketplace, Daraz.

The agreement was signed by FNCCI President Shekar Golcha and Daraz Managing Director Lino Ahlering at a programme organised at the FNCCI Secretariat on Thursday.

This agreement is a collaborative effort to integrate SMEs associated with FNCCI on Daraz, said the FNCCI in a statement.

According to it, SMEs are an important part of Nepal’s economy and they’re the ones who’ve been heavily affected by the COVID pandemic, so the FNCCI has placed special emphasis on its revival.

“Under this agreement, new SMEs registered through this program will not have to pay any fees for one year from January 2022 to December 2022 and will receive better promotions, visibility along with other added benefits. Daraz will also provide the right education and skills to SMEs to grow their online business,” read the statement.

FNCCI President Golchha said that this cooperation with Daraz is a milestone in the revival of SMEs throughout Nepal. He urged the SMEs to take full advantage of this opportunity.

The SME sector still needs more support and we will continue to work towards the empowerment of small businesses across Nepal, said Lino Ahlering, Managing Director of Daraz Nepal

Published in The Rising Nepal daily on 10 December 2021. 

FNCCI and NBA collaborate to support MSMEs

 Kathmandu, Feb. 25

Federations of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal Bankers Association (NBA) have entered an agreement to protect and promote micro, small and medium enterprises (MSMEs).

Both the organisation signed a memorandum of understanding on Thursday with the aim of facilitating the MSMEs with financial services. FNCCI President Shekhar Golchha and NBA President Bhuvan Kumar Dahal signed the MoU at a programme organised at the FNCCI secretariat.

As per the agreement, challenges in mobilising loan to MSMEs from commercial banks should be addressed through combined efforts and riskless business environment could be created.

It aims at forming joint task force at the central and federal level, formulating policy recommendations to facilitate financial service delivery, cooridinating with the respective agencies and requesting for the policy implementation, and running province-level financial literacy programmes.

Speaking at the programme, Golchha termed the agreement as a milestone in promoting the MSMEs in Nepal.

“We have trodden on a new route of cooperation. It will definitely resolve the constraints the MSMEs facing in obtaining loans from the banks,” he said.

Dahal said that the cooperation between the two organisations would be taken down to the provincial level.

Stating that the banking services have reached 749 local units, he maintained that the cooperation between the two organisations would benefit the MSMEs at the local level, ultimately.

Chairman of the Cottage and Small Enterprise Committee under the FNCCI, D. B. Basnet, another meeting would soon be organised where International Labour Organisation would also be invited to facilitate the implementation of the new plan.

Prakash Sharma, Senior Officer at the ILO, said that 80 per cent MSMEs were facing challenge to access to finance.

Published in The Rising Nepal daily on 26 February 2021. 

Small construction business face barriers to growth

Kathmandu, Sept. 6

A study on business climate for micro, small and medium enterprises (MSMEs) in construction in Dhading, Nuwakot and Gorkha districts, made public on Friday, has identified critical barriers to growth and how they play out at the local level.

“Small enterprises are the engine of economic growth in Nepal,” said Simon Howarth, Team Leader, Purnima Programme. “But after the earthquake they struggled to provide the services and materials people need to rebuild."

The study highlights the barriers and regulations preventing Nepal’s small businesses in the construction sector from growing. The high cost of doing business is a critical constraint faced by businesses which is even more pronounced for the micro, small and medium businesses, concludes the study.

Small businesses struggle with registration due to high costs, cumbersome processes and lengthy documentation. Unclear jurisdictions of different levels of government result in delays in registration.

Small construction businesses also need to obtain renewal permits and licenses. This not only adds to the costs, but also involves informal payments. “Entrepreneurs have incurred almost 73 per cent of the total registration costs informally,” said Raj Kumar Bhattarai, PhD, study team leader.

Together the three levels of governments levy seven different taxes on small construction businesses, and many entrepreneurs are unaware about the different obligations – suggesting low compliance.

Findings also suggest that small businesses do not have sufficient access to finance. Even though 68 per cent of respondents were aware of subsidised loans, less than one per cent had used such loans.

The cost of credit is high and lenders, rather than being business-friendly, seek high amounts of collateral for loans. Entrepreneurs preferred obtaining credit from banks because interest rates were lower than other micro finance institutions, but still have to deal with overly cumbersome paperwork in the process.

Another concern of MSME entrepreneurs is access to dedicated electricity connections which they said is time-consuming and costly, as is the process of obtaining route permits and renewals for transporters. The poor condition of roads in the districts also adds to costs of transport businesses.

Most MSMEs face labour shortages and increased costs, particularly the post-earthquake reconstruction activities “distorted” local wage rates. Entrepreneurs said wages have increased by 12-25 per cent after reconstruction began to gather speed.

“These findings from the study will guide the policy level dialogue which will be important for entrepreneurs not just in construction sector but to all the small and medium entrepreneurs in Nepal,” shared Bimal Ghimire, Programme Manager, Post-Earthquake Reconstruction, DFID.

The business climate study was carried out by Nepal Development and Research Institute (NDRI), administered by Confederation of Nepalese Industries (CNI) with support from the DFID-funded Purnima Programme on earthquake recovery being implemented in Dhading, Gorkha and Nuwakot districts by Mott MacDonald.

Published in The Rising Nepal daily on 7 September 2019. 

FNCSI-RBB sign a deal

Kathmandu, July 11

The Federation of Nepal Cottage and Small Industry (FNCSI) and Rastriya Banijya Bank (RBB) on Thursday signed an agreement to increase micro, cottage, small as well as youth and women entrepreneurs' access to finance.

FNCSI President Shyam Prasad Giri and RBB Chief Executive Officer Kiran Kumar Shrestha signed the agreement at an event organised at the bank headquarters.

Giri said that the new pact would help increase the access of the entrepreneurs at the lower rung of the business sector to the finance.

He said that the federation had about 35,000 general members, more than 11,000 women entrepreneurs united through 60 District Women Entrepreneurs Committee and 24 commodity associations. There are about 100,000 members associated with the FNCSI.

Shrestha said that the bank would extend lending to the business and industrial sector as per the government announced concessional loan policy. The bank will facilitate in providing credit facilities to the FNCSI members.

Women Entrepreneurship Loan, Commercial Agriculture and Livestock Loan, Youth Self-Employment Loan, Loan for the Foreign Returned Youth, Dalit Business Loan are the concessional loan schemes while Clean Environment Vehicle Loan and Micro, Cottage Small Enterprise Loan are the regular schemes.

Published in The Rising Nepal daily on 12 July 2019. 

Govt-community should work together to prevent economic loss

Lalitpur, Apr. 26

Japanese disaster experts on Friday said that the state and communities need to work together in reducing vulnerability in order to prevent huge economic loss.

"Disasters cause serious damage to economies. Haiti lost about 123 per cent of its total Gross Domestic Product (GDP) in 2010 earthquake," Professor at the Disaster Mitigation Research Centre at the Nagoya University Satoru Nishikawa said at the fourth anniversary commemoration seminar of the devastating 2015 Gorkha Earthquake.

The US$ 6.48 billion economy of Haiti witnessed the loss of US $ 8 billion in the tremors and the entire economy had collapsed, Nishikawa said.

Similarly, Guyana experienced loss equivalent to about 59 per cent of its GDP in the 2005 floods, Tajikistan about 23 per cent of GDP in the 2008 extreme temperature and Thailand about 13 per cent of its GDP in the 2011 floods.

Nepal witnessed a loss of about US $ 9.3 billion in the 2015 Gorkha Earthquake which was about 35 per cent of its then economy.

Many businesses, specially the Small and Medium Enterprises (SMEs) in the mid-hills and mountains, were damaged while some of the infrastructure projects such as the Upper Tamakoshi Hydropower Project experienced a serious geological damage.

Prof. Nishikawa further said that since the vulnerability scared away the foreign tourists and investors, the economy might get worse in the future.

"People at the lowest rung in the society are the most vulnerable and tend to suffer worse during the disasters. They are easily and repeatedly hit by the disasters, and chain of poverty can cause social unrest," he said.

He said that the loss of livelihood pushes more people into poverty.

Similarly, Shu Oyama, Deputy Mayor of Higashi-Matsushima City in Miyagi, Japan, said that building city was about building people, therefore, helping in the neighbourhood and revitalisation of the community should be given topmost priority in the post-disaster recovery efforts.

Senior Representative of Japan International Cooperation Agency (JICA) Nepal Kozo Nagami recommended the government to enhance the capacity of the Department of Archaeology (DoA) to facilitate the early and resilient rebuilding of the damaged cultural heritages and historic monuments.

"We want to enhance the capacity of the DoA in order to facilitate the reconstruction of the crucial cultural and historical heritages damaged in the country. There is a small cooperation, one JICA expert is deployed at the DoA to implement the rebuilding plan of Shiva Temple and Degu Taleju Temple at the Hanumandhoka Durbar Square," he said.  

He pointed towards the need for creating strong connections and cooperation among the stakeholders to preserve and recreate the heritage.

Chief Executive Officer of the National Reconstruction Authority (NRA) Sushil Gyawali said that the proposed National Disaster Management Authority would work in disaster preparedness and risk mitigation in the future.

The seminar on 'Sharing of experiences and lessons learned on build back better recovery' was jointly organised by JICA and the NRA.

Published in The Rising Nepal on 27 April 2019.