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How women entrepreneurs are coping with the economic headwinds

Times are hard for Nepali women in business and they are coping with several problems at once. Supporting them is not only important to preserve the hard-earned gains in empowerment and inclusivity but also safeguarding the country’s economic future.


After running a readymade garment company for 25 years, Sabita Maharjan, proprietor of Kirtipur Hosiery, stepped into the agriculture sector a few months ago. She ventured into the new sector by forming a group named ‘Rastriya Krishi Aatmanirbhar Arthatantra Nepal’ and starting a campaign in her native Kirtipur area which she hopes to extend to all 77 districts of the country after establishing an agribusiness company. “My engagement in the agriculture sector came as an alternative to the current depressed business environment created by the Covid-19 pandemic. Since the onset of the crisis, there was no production for months because of the lockdown. Even after the restrictions were lifted, we are operating at low capacity due to low demand in the international market, difficulty in sourcing raw materials and problems related to business financing,” she says.

The story of Mahalaxmi Shrestha, managing director of The Beekeeping Shop is not much different from that of Maharjan. Shrestha, who has received admiration for her work in women empowerment and innovative business ideas, which was growing fast prior to the pandemic, is now working with the sole focus of surviving the current crisis. “To cope up with the crisis, I have postponed all business expansion plans and focused on survival only until the situation improves,” she says. She points out to the loss of a market, increased transportation and production costs as the biggest hindrances at present.

Hajuri Bista, who is renowned for her pickle business, is also coping with the Covid-19 crisis. From reduced demand to difficulty in sourcing raw materials, the owner of the Hajuri Khadya Udhyog says that the last nine months were the most difficult time she has ever faced in business. “Despite the hardships, we did not increase the price of our products even after the restrictions were lifted as our focus for now is to operate the industry properly and help our workers sustain rather than earn any profit,” mentions Bista.

In the meantime, the situation has become quite strenuous for Shyam Badan Shrestha, chairwoman of Nepal Knotcraft Centre. Shrestha, who has been in business since the establishment of her company in 1984, says that she might have to close the company if the current dire situation continues. Domestic hotels, restaurants and other businesses related to tourism and hospitality are her major clients with countries including the United States, Germany, Denmark and Japan being key export markets for her company. “The situation has become very tough for us. We are also facing financial problems. We have taken a bank loan which we have not been able to repay as there is no income. After the restrictions were lifted, we slowly started to receive products made by women of different districts, but we can’t pay them. We are looking for solutions to survive the current crisis and revive,” shares Shrestha.

Young businesswomen have also found themselves surrounded by several pandemic-induced challenges. Binita Pokhrel is one such entrepreneur whose startup company PureJoy Pvt Ltd was doing good business with the rising popularity of its Mates Wine brand. “To continue business operations is better than to remain closed, but there hasn’t been any meaningful change for us at all even if the government has lifted the restrictions; our expenditure is higher than our income at the moment due to lack of customers. It is because of the reduced spending capacity of consumers,” says Pokhrel. Despite the sudden loss of the market, she is gradually resuming business operations while hoping to recover.

Struggling for Existence
Sabita, Mahalaxmi, Hajuri, Shyam Badan and Binita represent Nepali women entrepreneurs who are braving the present harsh economic headwinds. Not only are they struggling to sustain their businesses but are also doing things differently by adopting technology and innovative solutions to cope with the mountain of challenges erected by the global health emergency.

“The Covid-19 pandemic has taken a heavy toll on women-run businesses. With massive disruptions in both the supply and demand side due to the months of complete closure of the markets, sales and revenue were zero for businesses of most sectors and it has proven very difficult, particularly, for women entrepreneurs,” says Reeta Simha, president of Federation of Women Entrepreneurs of Nepal (FWEAN).

According to her, the market lost due to depressed demand at home and abroad, scarcity of raw materials and financing needs are the main problems for Nepali businesswomen at the moment. Simha says that while the pandemic has brought unprecedented challenges, it has also taught invaluable lessons to do things differently to survive the crisis and move ahead in the post-Covid world. “While conducting interaction sessions digitally with our members from different districts, we realised that women need to adopt alternatives in order to continue their business activities. We heard the story of an entrepreneur who buried her entire stock of 14,000 chickens at her poultry farm because she was unable to supply them to the market; she could have sold her produce later if the chickens could have been changed into dried meat,” she says, adding, “From instances like this, we have learned the importance of developing a value chain.”

Though a clear picture of the extent of the impact of the economic crisis to businesses is yet to emerge as the pandemic is showing no signs of abating, it has been estimated that women-led enterprises in Nepal have been among the hardest hit. This situation has threatened to erase the gains made over the past three decades in terms of women empowerment and inclusivity in the business sector. Nepali women, who were confined to household chores for ages, came upfront in the business sector after the restoration of parliamentary democracy in 1990. Their participation in various sectors increased visibly and many established themselves as entrepreneurs setting the example that women can indeed become successful businesspersons.

The number of women run-business has also grown exponentially over the years; the National Economic Census published by the Central Bureau of Statistics (CBS) in July 2019 shows that nearly one-third of enterprises in Nepal have women ownership. According to CBS, of the total 923,356 enterprises existing in the country as of April 14, 2018, 29.8 percent or 247,880 businesses related to trading and industrial services, agriculture, tourism and other sectors, are owned by women.

As per the census, businesswomen in Nepal are mostly into wholesale and retail, motor vehicles repair along with accommodation and food services, and manufacturing. Similarly, women entrepreneurs have also the largest share in the small and medium enterprise (SME) sector; it is estimated that around 60 percent of SMEs in Nepal are owned by women. According to the International Finance Corporation (IFC), the private sector arm of the World Bank, SMEs contribute 22 percent to Nepal’s gross domestic product (GDP) and provide employment to 1.75 million people across the country.

Major Problems
The coronavirus outbreak, which engulfed the globe after starting from the Chinese city of Wuhan in late 2019, is having a multitude of impacts to women entrepreneurship in Nepal which was showing promising signs prior to the Covid-19 crisis. All of sudden, businesswomen were forced to face realities such as the loss of a market and revenue, severe supply constraints, scarcity of raw materials, shortage of capital for business financing, increased production and transportation costs and deficiency of workforce.

“The situation has become bit easier after the government lifted the restrictions some two and a half months ago. But with the surge in Covid-19 cases, public health has remained a greater priority over anything. So, the impact of the pandemic will not disappear anytime soon,” thinks Simha. Most of the entrepreneurs NewBiz talked to cite the loss of market revenue stream as the biggest problem they have faced over the past nine months. “Our business has gone down by over 70 percent. Though the restrictions have been lifted and stores are open, people do not come to buy,” says Shyam Badan Shrestha.

For Maharjan of Kirtipur Hosiery Industry, bringing her business back to pre-pandemic positions is proving a colossal task. According to her, the recovery depends on how fast the demand for apparels improves in the market. “Our current problems cannot be explained. Outlets are closed, bank loan interest dues have piled up, and it is becoming arduous for us to recoup the losses. There is no business because clothes have become a secondary need for people at present,” she mentions.

Lately, some women-run businesses have started to recover after the restrictions in operating businesses and transportation were lifted. But the recovery is basically sluggish due to the suppressed demand for goods and services, say entrepreneurs. “The after effects of the lockdown can still be seen in business,” says Bista. She has also dealt with financial issues that presented serious challenges for her in terms of continuing her business.  “Sales have decreased by over 60 percent since the lockdown as our local market has shrunk,” she informs. However, exports have helped to cover losses to some extent. “After the restrictions were eased, we started receiving some orders from abroad. We have resumed production, yet it is difficult to do the work as local demand has declined sharply,” adds Bista.

Difficulties in Business Financing
At a time when revenue streams are drying up as a result of the economic crisis, managing finances turns difficult even for many large businesses. For Nepali women entrepreneurs, who are mostly running SMEs, financial management has become their biggest challenge to overcome at present. Realising the difficulties faced by businesses affected by the pandemic, the government in the Federal Budget for FY2020/21 announced a Rs 50 billion SME funding scheme to support businesses mainly in agriculture and tourism sectors.

To implement the programme, the Business Continuity Loan Disbursement Guidelines has been issued and banks and financial institutions have started to receive disbursement applications from November 25. Under this, concessional loans will be provided to SMEs and tourism related enterprises whereby highly-affected businesses can avail up to Rs 100 million, moderately-affected can get up to Rs 70 million and less-affected can receive up to Rs 50 million in loans.

Separately, a unified work procedure of the Concessional Lending Programme has also been announced incorporating the Women Entrepreneurship Credit Programme, Agriculture and Livestock Credit Programme, Youth Self Employment Credit Programme, Dalit Community Development Credit Programme and other existing lending schemes into it.  Similarly, Nepal Rastra Bank (NRB) in the Monetary Policy for FY2020/21 introduced ‘monetary stimulus’ measures including a loan repayment deadline extension for pandemic-affected businesses by six, nine and 12 months depending on the degree of impact on the particular sector as well as refinancing facilities and mandatory lending to MSME and agriculture sectors; the central bank also announced that priority will been given to women-run businesses participating in these financing schemes.  

Despite the programmes announced in the budget and monetary policy, many businesswomen are finding it hard to access the funds. The entrepreneurs who talked to NewBiz said that a number of hurdles exist to get the much-needed capital, which they say is because of problems in the implementation side of the policies. Sharing her experiences Maharjan says, “I have taken business loans from banks and finance companies. Although the business is barely at a minimum level at present, I am required pay interests anyhow. Similarly, I have found that availing the concessional loans announced by the government for women entrepreneurs is burdensome as the process is lengthy.”  She also feels that inadequate flow of information also bars businesswomen from participating in the financing schemes as many are unaware of the existence of such programmes.  

Meanwhile, Pokhrel also faced difficulties in getting the concessional loan. “I also applied for a concessional loan which got approved. But the process was very lengthy. As the money is provided as a collateral-free loan, I think the banks have trust issues regarding the lending. I applied for Rs 1.5 million but received only Rs 1 million,” she says.  

FWEAN President Simha is of the view that access to finance has always been difficult for women entrepreneurs and the Covid-19 pandemic has exacerbated it. “Although the government has announced a splendid policy, there are weaknesses in the implementation side,” she says. According to her, many women entrepreneurs have reported that BFIs hesitate to provide collateral-free loans. Also, she thinks arrangements in the monetary policy as very positive but observes weaknesses in implementation as it has not been easy for many women-run businesses to participate in the financing programmes. “Besides, the low-level of financial literacy has also barred women from visiting government authorities and banks and finding out about the schemes announced in the budget and the monetary policy,” says Simha.  

Getting Ready for the Post-Covid World
While the world waits impatiently for the pandemic to subside and the situation to return to normalcy, it has become very important to think about the way forward for women-run businesses in Nepal. Covid-19 has brought about a sea change in society from the lifestyles of people, monetary transactions to business activities. With more and more people acclimatising themselves to the use of information technology to carry on with their daily lives, the ability to do business digitally has become an essential element to survive and thrive in the ‘new normal’ for businesspersons.

While using the internet is relatively easier for educated young women entrepreneurs, the same cannot be said for those who are old or have a low-level of digital literacy. The fact that some women-run businesses have survived this crisis is because of their wise choices in terms of using web-based platforms such as e-commerce marketplaces, social media, websites and dedicated mobile apps for sales and promotion of their goods and services. According to Bista, increase in online sales has supported to sustain her business. “Young generation members of my family oversee our online business,” she says.

In the meantime, the use of internet platforms has provided a respite for Mahalaxmi Shrestha who has been promoting and selling different types of honey and other products such as beeswax cream, candles and honey soaps through social media, e-commerce sites like Daraz and Thulo.com and the website of her company. “Internet is the future of business. So, Nepali women entrepreneurs need to start adopting online platforms,” she suggests.

Realising the potential of online business, FEWAN has geared up to help women entrepreneurs to digitalise their businesses. In July of this year, FWEAN launched the ‘MA-Udhyami’ (Mahila Udhyami) campaign on the ecommerce platform Thulo.Com, as a part of the project ‘Revitalizing Women’s Businesses amidst Covid-19 Pandemic’ with the support of USAID’s Tayar Nepal. FWEAN has collaborated with EMERGE (Enterprise for Management, Economic Reform and Gender Equality), a multi-disciplinary consulting and capacity building company and Thulo.Com for the project.

“We provided training related to online marketing and sales to 18 women,” informs Simha. Besides, FWEAN is also helping women entrepreneurs in the area of capacity development collaborating with INGOs like Asia Foundation by organising different trainings. “Recently, we organised training programmes targeting returnee migrant women workers to produce items such as face masks and sanitisers,” she says.

The economic consequences of the pandemic have been unprecedented and Nepali women entrepreneurs have paid a big price. The government’s response to the crisis so far has been lackluster in terms of supporting them.  As women entrepreneurship is essentially tied in with the different aspects of socio-economic development such as women empowerment and gender equality, it has become necessary to help women to get back on their feet to safeguard the country’s economic future, say stakeholders.

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