FWEAN Working together for Socio-economic transformation.
Women represent the biggest group that has been deprived of political power, economic development & social upliftment.
Micro and SMEs account for substantial part of the economic activity in any developing country. When properly developed, it can constitute as a major part of export and foreign currency earner. Thus, helping to reduce trade imbalance. SME promote self-employment opportunities and creates jobs. Mobilizes and uses local resources, thereby raising income of the rural population.
SMEs in Nepal account for around 91% of total industrial establishments. Contributing 83% in employment generation. SME’s Shares about 80 % in the industrial sector’s contribution to national GDP. However this number has come down since 1991
Financial Year 1994/95 to 2006/07 total SME registered were - 114,988
By 2013/14 total SME registration was - 229,309. It was after lobbying with the government for identification as to howmany of them were women; that from 2014/2015 a box was placed in the registration form indicating Male/female. So 2015 saw - 22,155 SMEs registered of which 10,738 are run by women.
In the last 4 years there has been a decline in manufacturing industries and more growth in service sector
Type of businesses
SMEs are involved in processing and manufacturing of food items, consumer and household goods, both for export as well as domestic market. Other areas of SMEs’ involvement include forest fiber based industries, handicrafts eg. handmade paper, felt and woolen goods, carpets, hand woven textiles, pashmina shawls, wood and leather goods. Agro-based produce such as tea, coffee, vegetables and horticulture products.
Opening up of investment for infrastructure development to the private sector, investments in micro hydropower and tourism resorts have also been witnessed.
At the Micro level
Agriculture provides only seasonal employment which constitutes 88% of the total population. Hence, off- season and off- farm activities such as weaving, knitting, basketry, teashops and roadside shops complement rural incomes. Most produce and cater only to the local markets, export oriented SMEs are few. Those that export are not able to expand due to multiple inherent constraints. At the micro and cottage level, a sizeable number of unregistered enterprises operate. The informal economy is by far the largest sector where there are more than 90% of working women. Another challenge most women do not own property. Only 19.71% women have fixed assets registered in their name.
FWEAN Accept Challenges:
Need to address challenge
Nepalese SMEs are finding difficult to compete with imported products in the domestic and exportable goods in the international markets due to globalization and economic liberalization. Nepalese SMEs may lose out to the regional and global players if this issue is not addressed in time.
Nepal’s development plans have been promising different incentives for SMEs however, lack of awareness, lapses in policy declaration and problems in implementation have largely prevented SMEs from deriving any significant benefits.
Credit and management challenges
Credit worthiness of SMEs is low, which impedes their development. Despite provisions of access to Institutional credit, they are unable to take advantage due to Low capital base and insufficient collateral. Technology used is usually limited in capacity and mostly outdated. Lack of Managerial competence - Traditional management practice, limited delegation of authority to staffs are some of the constraints.
Marketing Constraints challenges
They are unable to execute large orders because of their size, limited access to resources and low production capacity.Poor knowledge and information about business opportunities and marketing. Lack of access to technology suited to their specific needs and to periodic upgrading. This has also prevented SMEs from meeting different environmental regulation requirements of the export market.
Government’s efforts and initiatives challenges
Government has identified priority areas for improvement and focused on 19 products (NTIS).17 of these products/sectors have medium to high export potential and medium to high socio-economic impact. Out of the 19 identified NTIS products, more women are involved in 15 sectors, while the remaining 4 , viz. labor, engineering services, hydro-electricity , IT and BPO services have less involvement of women.
Although government has done SWOT analyses of the identified products and formed an action plan, it has still to reach the women who are really involved in it. Planning by the government did not involve women entrepreneurs – therefore: Identifying products that are viable and involving most women was not given priority - natural fiber products , Chyangra and goat farming, semi precious stones of which Nepal is rich hardly attracted Governments attention. Lapsi available in most parts of Nepal and where many women are involved has hardly attracted interest.
What Government could do
More liberalized financing schemes- provision for collateral free loans at lower interest rates. Implementation of the Entrepreneurship Development Fund. Advocacy and dialogue between government and women business community thru NBF forum. Need for more involvement at central, district, and grass root level to ensure better flow of information and programs. Government’s initiatives to buy Nepali products should be backed by policies that are SME friendly. Policies and programs need to address capacity building at different levels.
1. At the grass root subsistence level
2. SME’s who want to grow
3. Entrepreneurs who are already established and want to move into bigger business ventures
Though needs may be similar, access to finance, innovative ideas, skills, technology and access to market differs at different levels.
Need for Policy reform
Need for a data base of women’s participation in the work force in manufacturing and service sectors for a National Gender Responsive Planning and Budgeting .Need for industrial and business promotion policies and programs [encouraging women involvement] catering mainly to women. Revision and Implementation of the Industrial Policy, Trade Policy and other related acts. Labor laws to be addressed if Nepal is to be competitive in the world market. Minimum salary/wages should be in conformity with production .Simplified registration process, one door policy to cover all requirements.
At present there are 42 places for registration, excluding other smaller places which is a cause for confusion. Simplified requirements for business transactions—need for certification at various places means money, time & effort! Stronger governance and better monitoring necessary to prevent illegal imports. Export and import from SAARC countries needs to be simplified
Quarantine, certification and laboratory facilities at more export exit and entry points. Capacity building for marketing at different levels; from collection, processing to finishing and marketing. Providing internet access for exposure to new ideas and information all over Nepal. Trade at hand - business opportunities through cell phones. Infrastructure initiatives that help women to carry out everyday chores more efficiently. These investments will bring returns in the form of increased women’s engagement in market-based activities and greater productivity.
- Advocated for Entrepreneurship Development Fund.
- Collateral free bank loans.
- Inclusion of women in different trade and commerce boards and committees.
- Advocating for women friendly agricultural policies and agricultural loans.
- Encouraging women from informal sector to register their businesses.
- Creating opportunities for both rural and urban women's participation in seminars and trade fairs – national and international.
- Conducting first all Women's International Trade Expo from April1 to 3 2016.
- Different Trainings and exposure visits.
- Marketing platform through WEAN Cooperative and SAARC Craft Village.
- Providing marketing platform between members.
- Establishment of marketing portal for women through www.winbiz.com.np
This requires government’s involvement in diagnosing and monitoring supply bottlenecks, and markets, implementing effective purchasing strategies that do not harm its own internal market, managing logistics process and protecting inefficient utilization of its resources.
Women too need to get organized into commercial production that conforms to export market requirements, in terms of quality, quantity and cost.