Shabda Gyawali's Blog

The Ministry of Industry (MoI) will initiate homework on the Women Entrepreneurship Development Fund (WEDF) by the end of this week. This year’s budget has allocated Rs 100 million for the setting up of the fund. MoI had formed a seven member working committee to prepare the draft of the fund’s working guidelines. The draft guidelines have proposed providing collateral-free loans up to Rs 300,000 to women seeking to start their own business. Source: Kathmandu Post

There is a growing consensus between politicians, policymakers, development professionals and private sector representatives that a thriving private sector is the silver bullet for Nepal’s economic development. In a country like Nepal, the contribution of small and medium enterprises (SMEs) plays an instrumental role in the overall advancement of the private sector. SMEs are a major source of employment generation. These enterprises also spur innovation, productively and invigorate the local economy. A recent study shows that in a developing country, every dollar of investment in an SME has a multiplier effect, generating additional 12 dollar in the local economy. According to some estimates, as of 2010, SMEs (excluding microenterprises) in Nepal employ approximately 57 percent of total work force. Despite SMEs being the major driver of economic growth and poverty alleviation, the contribution and challenges faced by SMEs have long been overlooked by both the government and leading pr...

The Youth and Small Entrepreneurs Self-Employment Fund (YSESEF) is all set to release funding to central cooperative associations along with commercial banks to implement the highly prioritised Youth Self-Employment Fund (YSEF). The YSESEF has planned to call central cooperative associations to submit their proposals by mid-July with a clear roadmap stating the types of businesses the cooperatives under them could do in the areas of production, service and small industry, their financial capacity and adequate basis for loan recovery. The government has decided to move the programme ahead on a massive scale through government-owned banks and other banks with large government investments as private sector banks have been reluctant to participate in it. “The plan to go through central cooperative associations is intended to reach out to as many needy people as possible as government-owned banks are not present as extensively as would be desired,” said Binod Kumar Guragain, execut...

So today, I read a new that due to restriction by Rastra Bank to issue new licenses to open Class A,B and C  financial institution,more and more promoters are interested in opening  Class D (Microfinance) institution. The article say-So far the central Bank has received 45 applications.Currently,there are 23 MFIs operating in the country. This makes me wonder whether restriction on setting up large scale banks are a good startergy to increase financial inclusion?