Kathmandu's population - 4 million ... total number of public toilets 32

Lets privatize the public toilets...........................................

What sucks?

Nepal Investment Board should bring in investments in social enterprises

Kudos to Mr. Radesh Pant for accepting the career denting challenge of heading the Nepal Investment Board (NIB). I hope under his leadership,NIB will lure in lots of much needed FDI in the country. Mr Pant knows it well that he is going to face significant domestic challenges like militant labour, extortion, local opposition, arbitrary government policies, red tape, corruption, power cuts, bandas etc . I am confident that he and his team is competent enough to acclimatize/ face these never ending domestic challenges .In my opinion, in the coming year,the bigger concern for NIB will be the uncertainly in the global macro economic situation..........................

"According to a 2010 Central Bureau of Statistics survey, there were 1,897 firms operating with foreign investment from 139 countries. India had the largest investment in Nepal with 393 companies, followed by China with 179, Japan 132, South Korea 94, UK 94, Germany 61 and Switzerland 27." click here to read more

NIB is banking heavily on India to investment in sectors like infrastructure and energy, however I believe in 2012, it is unlikely that Indian private sector will expand its balance sheets to own assets in Nepal......According to a study - "Credit Suisse looked at loans to 3,550 non-financial services companies in India with aggregate borrowing of $385 billion at the end of March and found that nearly 30% had net debt more than six times current earnings before interest, taxes, depreciation and amortization. That's increased by about 50% in the past five years." click here to read mo

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Uncertainly in the foreign exchange rate (18% fall in the rupee against the dollar since April ,2010) and growing concern of sovereign debt crisis in Europe will likely retard FDI outflow from European Countries.........................................Chances are also high that major European Countries will experience recession in 2012...

Considering the global macro economic situation, In 2012, Nepal Investment Broad needs to attract low capital intensive FDI and Impact Investing in social business and enterprises ...... NIB should work to bring in FDI/Impact investing in sector like health Care, micro finance agriculture, small scale clean tech,water and Sanitation ... ............. Bringing in FDI in social enterprises will not only help flight poverty and other environmental concern but will also help build a bigger and stronger "traditional" FDI suitable eco-system in Nepal ...........

NIB should help potential foreign private equity/social venture fund investors to conduct investment due diligence, support deal flow and provide investment safely .....Typically , impact investors are much more risk takers then "traditional" foreign investors, I think it will be less laborious to attract foreign impact investors despite investment risk from domestic variables.....

Collaborators or competitors for the Nepali Commercial Banks

Marred by the fiscal austerity and debt deflating initiatives western countries are pivoting their "foreign aid" distributing mechanism. According to a recent article published in the Financial Times , UK will try Sovereign Wealth Fund model to distribute aid in India. Which basically means the United Kingdom's Government will start investing rather then giving "grants" and other kind of free/subsided money to resolve pressing social and environmental challenges in the developing countries.These investments are expected to make financial returns to the UK taxpayers. If this model is successful in India UK government has plans to replicate this investment,rather then aid model to other foreign aid recipient country ......

USAID has also started a similar kind of "impact investing"model.....one of the many initiatives of USAID is its recent partnership with -JPMorgan Chase & Co., the Rockefeller Foundation, Bill & Melinda Gates Foundation and the Gatsby Charitable Foundation to invest $25 million worth of commercial capital in agriculture-related small and medium-sized enterprises in sub-Saharan Africa.

Nepal in the future might see a similar investment policy from USAID & DFID....... SO what does that mean to the Nepali Private sector, Development Agencies ,NGO and commercial banks ?

My questions :

1. Less Anti-Aid sentiments,since investments will fall under FDI not foreign AID ?
2. Investments from USAID and DFID in private sector also means contribution for the entrepreneurial culture and venture capital eco-system in the country ? If these organization are providing equity capital,that means, the entrepreneurial will have more guidance and flexibility to take more risk ?
3. Entrepreneurs will be more willing to take equity investments /debt from these organizations , does that that means increasing competition for the commercial banks ? Cost of capital for these organization will be cheaper then that for the commercial banks.....
4. How will these organizations investment there risk capital ? existing channels like " NGOs" are incompetent to do investment due diligence and support operation of the ventures ....

Youth Self-Employment Programme- A classical case of financial inclusion failure......

Since the inception of the Youth Self-Employment Programme,"consultants" have charged development organizations thousands of dollars to conduct diagnosis and give a third party accreditation to the program. The glossy annual reports of various development organizations proudly claims that -Youth Self-Employment Programme is the solution to ignite entrepreneurial cultural and generate self employed jobs for the youths in the country.

Despite of the lofty claims,the "real" performance of the program has been extremely unsatisfactory - " Although the government targeted to employ 50,000 individuals through the Youth Self-Employment Programme (YSEP) this fiscal year, the progress so far has been disappointing, with just 1,842 employed. " ( Kathmandu Post, Dec 20)

SO what Sucks? What is not working ?

" The fund has so far provided bulk loans worth Rs 330 million through 28 Banking and Financial Institutions and cooperatives out of its total approval of Rs 1.75 billion. With lent amount, it was expected that a total of 22,827 individuals would be employed." click here to read more

Bank are reluctant to lend because of the following reasons -

1. Lack of proper government enforcement
2. High transaction and due diligence cost
3. High Risk ( political pressure to write off the loan )

What is Impact Investing?

Need to showoff a little bit..Was lucky enough to interact with JED EMERSON..Thanks to Professor PAUL HUDNUT...

Impact investment in ASIA .... And again Nepal is not even mentioned,WTF?

I personally feel bit frustrated when Nepal is not mentioned or considered as a potential market for Impact Investing activities in glossy impact investing reports .....................For CRYING out load, Nepal is if not the poorest, one of the poorest countries in ASIA........ Our people also have strong entrepreneurial spirit and YES we also believe that it is entrepreneurship and investments not AID that leads to Economic Development ............

Asian Development Bank came out with a report called "Impact Investors in Asia

Characteristics and Preferences for Investing in Social Enterprises in Asia and the Pacific"

Yes What Nepal is not even mentioned ............................................... Some time it makes me wonder if impact investment is also about " Trophy Investments" and they don't want to take risk ??

Need For micro insurance products in Nepal

Recently read a news about how .... "1,300 chickens and 200 ducks at Manohara Landless Squatters´ Settlement have been destroyed on the suspicion of bird flu."....These birds were destroyed as per the government decision............ Kudos to rarely experienced proactive effort of the Government of Nepal to tame this dangerous endemic .........In my impact investing mode ,reading this article few questions and thought came crossed my mind..

1. 1,300 chickens and 200 ducks had a lot of financial value. What are the implication of destroying the 1500 birds ? These birds might have been the financial asset of many low income people ...
2. Did the Government announced any compensation package to those who suffered the financial loss ?
3. Nepal Insurance Board need to put there act together and promote micro insurance among the low income people. Micro insurance coverage for livestock (is chicken considered livestock) can help low income people to hedge there risk
4. Like how Nepal Rastra Bank has made it mandatory for large scale financial insinuations to lend certain percentage of their loan portfolio to "deprived sector",may Nepal Insurance Board need to adapt similar kind of policy and force Insurance companies to sell micro insurance product for vulnerable communities ?
5. I want some haas ko choyela :)

Micro-Insurance:

The insurance sector in Nepal is governed by the Insurance Act, 1993 under the supervision of Nepal insurance board (IB). Over all insurance sector in the country is not well develop, there is a lack of awareness about insurance among the general population and the existing companies have some little interest to penetrate the semi-urban and rural areas.

To promote micro insurance sector in the country, micro insurance bill 2010 was proposed by the Nepal Insurance Board. In 2011, the Finance Ministry of Nepal directed the Nepal Insurance Board to identify 10 rural districts where first phase micro insurance program can be implemented. According to the Nepal Insurance Board, micro insurance will cover health and assets like crops, livestock, rickshaws and tea shops. Currently, the IB has identified six micro insurance products which will provide coverage of up to Rs 100,000[1].

In the near future, the Nepal Insurance Board also plans to issue a directive that will oblige all the Non Governmental Organization, community groups and microfinance companies to work as agents of government-authorized insurance companies. Currently, some of the microfinance companies are selling micro-insurance products without taking the permission of the Nepal Insurance Board

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[1] http://www.myrepublica.com/portal/index.php?action=news_details&news_id=38414

Farm gate price of chicken is about Rs 145 per kg.