Friday, June 19, 2020

Dolma invests US$ 1 million in Sastodeal

Kathmandu, June 17

Dolma Impact Fund has made additional investment of US$ 1 million in Sastodeal.com, an online shopping platform.

Sastodeal has raised $1 million from Dolma alongside other existing shareholders as part of an ongoing fundraising round.

The growth investment will be used towards reaching Sastodeal’s milestone target of achieving Rs 1 billion in annual revenues within next 18 months, said the company.

Founded in 2011, Sastodeal.com is one of Nepal’s biggest online shopping platforms. The company was growing at near-about 300 per cent before COVID-19 hit Nepal.

During the lockdown, Sastodeal saw new customer numbers spike. “We worked as part of a government taskforce, along with other e-commerce providers, to deliver essentials during lockdown,” said Chief Executive Officer of the company Amun Thapa. “Now that the lockdown is easing gradually, we can see there is more demand than ever as new customers are now familiar with online shopping.”

Dolma, the first international private equity fund investing in Nepal, is already a shareholder in Sastodeal.

The new investment will be used in operations, including an expansion of product categories, talent acquisition, core operations, vendor empowerment, and an expansion to other regions in Nepal.

“One thing that was obvious during lockdown was the limitation of catering to customers outside the Kathmandu Valley. This investment will enable us bring the benefits of e-commerce to both consumers and businesses to a much wider audience,” said Thapa.

Tim Gocher, CEO of Dolma, added, “This is a high growth industry which performed a vital task during lockdown. This new investment reflects our belief in the Sastodeal team and our continued investment in Nepal’s technology sector, alongside our healthcare and renewable energy investments. We are delighted to lead this round of financing alongside local partners.”

Published in The Rising Nepal daily on 18 June 2020. 

Wednesday, June 17, 2020

Economy Shows Symptoms Of COVID-19 Contagion

Kathmandu, Jun 16

The remittance inflow has fallen significantly following the COVID-19 pandemic outbreak.

Remittance inflows decreased by 6.1 per cent to Rs.680.84 billion in the 10 months of the current fiscal year 2019/20 against an increase of 19.6 per cent in the same period of the previous year, according to the Macroeconomic and Financial Situation report of the Nepal Rastra Bank (NRB).

In the US Dollar terms, such inflows decreased by 7.4 per cent in mid-May against an increase of 9.3 per cent in the corresponding period of the previous year.

Remittance inflows had decreased by 4 per cent to Rs.626.90 billion by mid-April against an increase of 20.9 per cent of the previous year.

Impact of COVID-19 has become more visible in other areas of economy as well due to decreased economic activities, foreign trade and everyday operations of the government and private sector.

According to the central bank, the current account registered a deficit of Rs.105.74 billion in 10 months. Such deficit was Rs.221.77 billion in the same period the previous year.

In the US Dollar terms, the current account deficit remained at 938 million in the review period compared to 1.96 billion a year ago.

Likewise, capital transfer and foreign direct investment (FDI) in Nepal amounted to Rs.12.49 billion and Rs.17.42 billion respectively. In the same period of the previous year, capital transfer and FDI had amounted to Rs.13.48 billion and Rs.9.47 billion respectively.

Balance of Payments (BOP) remained at a surplus of Rs.120.90 billion in the review period against a deficit of Rs.68.20 billion in the previous year, said the NRB.

Gross foreign exchange reserves increased by 18.9 per cent to Rs.1,235 billion in mid-May 2020 from Rs.1,038.9 billion in mid-July 2019.

In ten months of 2019/20, merchandise exports increased by 4.5 per cent to Rs.82.06 billion compared to an increase of 18.9 per cent a year ago.

Exports to India increased by 16.1 per cent whereas exports to China and other country decreased by 38.6 per cent and 14.6 per cent, respectively. Exports of palm oil, ayurvedic medicine, paper and Nepalese paper products, plastic utensils, M.S. pipe, among others, increased whereas exports of zinc sheet, wire, polyester yarn and threads, woollen carpet, juice, among others decreased.

Similarly, merchandise imports decreased by 13 per cent to Rs.1025.14 billion against an increase of 19.6 per cent in 10 months of the last year.

Destination-wise, imports from India, China and other countries decreased by 17.5 per cent, 7.6 per cent, and 2.9 per cent, respectively. Imports of crude palm oil, chemical fertiliser, crude soya bean oil, computer and parts, edible oil, among others increased whereas imports of petroleum products, transport equipment and parts, M.S. billet, gold, cement, among others decreased in the review period.

Increase in export and decrease in import has resulted in narrowing the trade deficit.

Total trade deficit narrowed down by 14.2 per cent to Rs.943.07 billion in the ten months of 2019/20. Such deficit had expanded by 19.7 per cent in the same period of the previous year.

The export-import ratio increased to 8 per cent in the review period from 6.7 per cent of the previous year.

Inflation goes up

The consumer price inflation stood at 5.83 per cent in mid-May 2020 compared to 5.29 per cent a year ago.

Food and beverage inflation stood at 8.66 per cent whereas non-food and service inflation stood at 3.67 per cent in the review month. Within the food and beverage group, the price of fruit, vegetable, pulses and legumes and spices sub-groups rose significantly in the review month.

However, the expenditure of the federal government based on banking transactions (excluding direct payments and unrealized cheques) stood at Rs.725.61 billion which is higher than the expenses Rs.677.68 billion made last year. 

But revenue collection has gone down. In the review period, revenue collection based on banking transactions (including the amount to be transferred to provincial and local governments) stood at Rs.606.82 billion. Total government revenue was Rs.665.91 billion in the corresponding period of the previous year.

Published in The Rising Nepal daily on 17 June 2020. 

connectIPS daily transaction crosses Rs. 2 billion

Kathmandu, Jun 16

Nepal Clearing House Ltd. (NCHL)’s connectIPS e-Payment System has crossed daily transaction value of Rs. 2 billion.

The technology instrument has achieved the result for the first time on 8th June, 2020 and continues to do so.


“This is a landmark reached for a real-time retail payment system implemented by NCHL and since its operations from May 2019,” said the company.

The month to month connectIPS transaction has grown by 75 per cent and 186 per cent in terms of number and value respectively, during the three months of lockdown.

The monthly total transaction value in connectIPS e-payment system during the last three Nepali months of Chaitra, Baishak and Jestha have remained at Rs. 13.8 billion, Rs. 24 billion and Rs. 39.5 billion respectively.

“It is also noteworthy that 64 per cent of the transactions were initiated through National Payments Interface (NPI), which is a consolidated (Application Programming Interface (API) for allowing the institutions to carry out their transactions through their alternate channels towards connectIPS or NCHL-IPS or other systems,” said the NCHL.

NPI acts as a local domestic payments rail for integration and interoperability of the alternate channels (mobile, internet, corporate banking) of bank and financial institutions, Payment Service Provider/Payment System Operator (PSP/PSO), government entities and other large institutions.

It is being used by six mobile wallets (other 8 in pipeline), almost all insurance companies, remittance companies, Nepal Stock Exchange, stock brokers, social security fund, employees’ provident fund, and almost all BFIs.

connectIPS platform has enrollment of over 58 BFIs and allows the bank customers to initiate fund transfer based on bank account of any beneficiary or mobile number of other users.

Such fund transfer can also be done easily from the bank’s own mobile or internet banking, which does not require separate enrollment in the connectIPS.

Some of the other payments available in the platform are government revenue payment, CIT loan repayment, Social Security Fund payment, credit card bill payment, mobile wallet top-up, capital market related payments, e-commerce payments, school/colleges, insurance payments, etc.

Published in The Rising Nepal daily on 17 June 2020. 

Tuesday, June 16, 2020

CNI suggests NRB to reduce interest rate

Kathmandu, Jun 14

 Confederation of Nepali Industries (CNI) has suggested the central bank to gradually reduce the interest rate through the upcoming monetary policy to promote investment.

The steps announced by the central bank in the past were good, but they are not sufficient, said the business body in its recommendations for the monetary policy for the fiscal year 2020/21 which is submitted to the Nepal Rastra Bank (NRB) on Sunday.

Submitting the suggestions to Governor Maha Prasad Adhikari, CNI urged him to capitalise the interest in this difficult period, extend the loan period, simplify the process to obtain additional loan, and restructure the credit.

It has urged the central bank to simplify the process of  Rs. 150 billion refinancing facility recently announced by the government, and start it at the earliest.

“The limit of the concessional loan should be 20 per cent of the total loan obtained by the business or industry or Rs. 200 million in amount. Likewise, no business should be barred from getting the refinancing facility,” it said while urging for special provisions of refinancing for the cottage, small and medium scale enterprise.

Governor Adhikari said that the central bank had taken the suggestions positively.

Stating that the economy was at a critical juncture due to the pandemic there were challenges to resume business operations, he maintained that the NRB would try to soothe the private sector industries through new and innovative programmes.

A delegation of CNI led by its President Sathish Kumar More had submitted the suggestions to Governor Adhikari.

Published in The Rising Nepal daily on 15 Juen 2020. 

No virus casualty of Nepalis abroad in past 9 weeks

Kathmandu, Jun 14

 For the first time in the last nine weeks, there was no death of Nepali citizen caused by COVID-19 in the foreign countries across the globe.

Previous eight weeks were dotted with the death of Nepalis in various countries but there was no death in the past one week while the infection rate has also come down significantly, said the Non-Resident Nepali Association in a statement on Sunday.

According to the Health Committee of the NRNA, about 9,000 Nepalis were recovered from coronavirus in the past week.

Nepalis in countries like Denmark, the Netherlands, Australia, Japan, Myanmar, Poland, Russia, New Zealand, Canada, Finland, Ireland, Germany, Sweden, France and Belgium have recovered from the virus.

About 17,713 Nepalis in foreign land are infected with the COVID-19, with the infection in three citizens in Africa, for the first time since the pandemic outbreak five months ago.

NRNA said that 127 Nepalis have died of the COVID-19 in foreign countries. 18 have died in Nepal which brings the death toll at 145.

Death of Nepali nationals occurred in 13 countries, including the United Kingdom, the United Arab Emirates, Bahrain, Kuwait, Qatar, Ireland, Japan, Turkey, the Netherlands and Sweden.

Published in The Rising Nepal daily on 15 June 2020. 

Sunday, June 14, 2020

Local bodies brace for budget fighting COVID-19 challenges

Kathmandu, Jun 13

Local governments are struggling to conceptualise, discuss and develop their annual budget for the coming fiscal year 2020/21 amidst the COVID-10 crisis.

The budget is created with a series of discussions with the community groups, women and other sectoral groups including the opposition parties, experts and elected leaders and its exercise begins months before the announcement of the estimates of income and expenditures for the next fiscal.

However, the lockdown and strict social distancing requirement have posed challenges to the local bodies to hold the discussions and solicit the ideas and programmes.

It has been even more difficult in the local units with poor internet connection and digital literacy among the elected representatives which bars them from holding the digital meetings or asking to submit the ideas via email or social networking sites.

But the coronavirus pandemic has not deterred the local governments from exercising the budget preparations including holding meetings and developing programmes.

Nagarjun Municipality of Kathmandu district has almost completed the pre-budget discussions even amidst the growing global health crisis and lockdown.

"We have organised all-party meeting, and discussions with the lawmakers from the federal and state parliaments and opposition party leaders, women and children groups while maintaining social distancing and safety measures," said Mohan Bahadur Basnet, Mayor of the municipality.

Gandaki Gaunpalika in Gorkha district has also held the stakeholders’ meeting including community discussions for the pre-budget discussions. It has called the Budget Task Force meeting on Monday to discuss the budget procedures.

"COVID-19 has created problems as its patients were identified here. But the Gaunpalika is applying every possible alternative to hold the discussions and design programmes for the next year," said Ram Prasad Regmi, Chair of ward no. 8 of Gandaki.

Local units in most of the mid-hill districts are in comparatively easy situation as the infection is spread a little as compared to the districts in Terai.

"Discussions are being held smoothly among the local people and stakeholders," said Kabiraj Dhakal, Chair of ward no. 6 of Kaligandaki Gaunpalika in Gulmi district. Poor reach of and access to internet and telecommunication in some places has hindered the digital interactions there, however.

But the situation in Terai is more challenging due to rapid spread of the coronavirus. For example Pokhariya Municipality of Parsa district is facing problems in organising meeting for budget formulation.

"The pandemic has affected the entire budgeting process. No meetings could be held so far. Many local bodies like ours do not have the administrative staff at this crucial time," said Salma Khatun, Deputy Mayor of Pokhariya.

However, she said that the municipality was preparing the policy and programmes for the next fiscal year and waiting for the state-level budget to make the exact estimates of income.

 

Budget on 24 June

Despite multiple challenges, the local bodies, while talking to The Rising Nepal daily, said that they would announce the budget on 24 June, the deadline set by the law. Some of them and many others are planning to announce the policy and programmes and budget at the same date.

Intergovernmental Fiscal Arrangement Act, 2017, has a provision that the local bodies must announce the budget for the upcoming fiscal year by 24 June – about 10 days later than the states' budget and 25 days following the federal budget.

 

Priority to health and employment

The local bodies are focusing on the programmes on health and employment, especially on agriculture and cottage enterprises as mentioned in the guidelines prepared by the federal government for the local bodies.

The guidelines suggested the local governments to focus on the operation and management of quarantine centres, distribution of relief, health awareness campaign, and projects that create employments like the small infrastructure projects, commercialisation of agriculture and cottage and small industries.

"Our priority is agriculture, health and employment including the Youth Self-employment Programme and Prime Minister Employment Programme," said Regmi.

Chandragiri Municipality has accorded priority to agriculture, health, education and employment. Mayor Basnet said that the state and federal governments must increase budget for the employment and health sector since the municipality was already short of resources as it lost about Rs 250 million in the last 3 months of lockdown.

Gandaki, Kaligandaki and Pokhariya also echoed the same opinion and are looking up to the state and federal governments for additional support to manage the required funds.  

Dhakal said that the Gaunpalika government was planning for 'one household, one product' and creating connectivity between the producers and market centres.

Likewise, Khatun said that although the PMEP was relevant for short-term employment generation, people need programmes that can raise the living standards of people in the run.

The local bodies are also facing tough time to arrange chemical fertilisers and agricultural inputs

Published in The Rising Nepal daily on 14 June 2020. 

Hire Me to support 50,000 people to find jobs

Kathmandu, Jun 12

National Academy for Financial Services has launched Hire Me Nepal project with the aim of providing job to about 50,000 people in a year.

The project will collect the information of the eligible candidate through an online portal and provide it to the potential employer, including the Labour Information Bank of the government.

Nepalis in and out of the country can access the portal and enter the required information. “We aim to create a meeting point between the employer and the job seekers. It will be launched in the first week of the next fiscal year,” said Ramesh Kumar Bhattarai, President of the academy.

The project aims at updating the records of 500,000 citizens in the first year and 1 million in the second year. It will be launched in all provinces and promoted through a media campaign.

The company also aims to train the interested candidates at a minimal cost.

According to a rough estimate, about 2.5 million Nepalis will lose their jobs in and out of the country. To address the challenge, the government had announced a ‘Labour Information Bank’ in the budget of the next fiscal year.

Published in The Rising Nepal daily on 13 June 2020. 

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