Accessing Bank Financing is Difficult for Women Entrepreneurs

  13 min 34 sec to read
Accessing Bank Financing is Difficult for Women Entrepreneurs

Dr. Pratibha Pandey is the founder and CEO of Harveda Botanicals and Catalyst Technology. But she prefers to identify herself as a science entrepreneur. After completing her Ph.D. in Organic Chemistry from the North-Western University of the United States, she returned to Nepal in 2015. While researching various plants, she felt the need to combine her research with entrepreneurship. Thus her entrepreneurship journey began. Madan Lamsal, Editor-in-Chief of New Business Age talked to Dr. Pandey to know more about her entrepreneurship journey, the challenges of women entrepreneurship in Nepal, and ways to overcome them. Excepts:

Many choose to stay in the United States after completing their study saying that there is no opportunity in Nepal. What opportunities did you see and return to Nepal?
Rather than the opportunities, we both, me and my husband, returned to Nepal thinking that we should do something in Nepal, even though it is small, with a feeling that who would do if we don’t. We have seen a lot of opportunities in this field in Nepal.

You are also a member of the Intellectual Property Protection Society of Nepal (IPpSON). What does IPPSON do? What is your role in it?
IPPSON is an organization with a long history. I joined it at the request of the incumbent chairperson Krishna Gyawali, who is also a former government secretary. Though I hold three individual patents in the US, I don’t have much idea about these things. After I joined the IPPSON, we started a training program under the World Intellectual Property Organization (WIPO). We conducted a training on patents at the Department of Industry. We also organized awareness training on intellectual property. Our law recognises intellectual property like other physical property.

As a member of WIPO, where do we stand in terms of the law?
A law on intellectual property has been drafted. The policy is good. But the law is yet to be passed. In my opinion, there exists a huge gap between policy and its implementation. The law has a lot of things, but the implementation aspect is weak. Not many patents have been registered. The workforce deputed to oversee patent issues is very small. Physical infrastructure is also very weak. Despite this, some meaningful work has been done in the field of copyright and trademark in Nepal. The provision of copyright has protected our music and articles. Instead of complaining about where we are lacking, we have been moving forward by looking at where we can do better.

Large industries with foreign investments came to Nepal such as Nerolac Paints. But they ran into trademark troubles. The case against Century Spices also came up. How will this affect foreign investment?
It makes an impact. I have been unable to decide whether to bring my patents to Nepal. One should disclose everything while registering a patent. If it is stolen here, there is a doubt on whether Nepali law will protect it. Another important aspect of intellectual property is that our intellectual knowledge and property are on the verge of disappearing. There is a need to protect our traditional knowledge and skills in herbs, Dhaka fabric preparation, etc. For this, we should go for collective trademarks like TK (Traditional Knowledge) and GI (Geographical Indication). We have put these things in the policy.

You are an educated and enterprising woman. But there is no link between the educational community and entrepreneurs in Nepal. What can be done to connect these two?
Students good in science and mathematics in Nepal start talking about becoming doctors or engineers even before they graduate from school. The same thing was about to happen to me. But while studying in the US, my mind became a little wider. During my Ph.D., I thought that studying science is not about working independently of others. That’s because science has a lot of influence on our daily life. I thought I should look for that. Then I began to see the connection between entrepreneurship and science. While doing my Ph.D., I also studied at Kellogg School of Management. My mind opened up only after going there. Students of science and mathematics also need to be taught management. Nominal internships are offered to science and math students in Nepal. It has to be made more practical, connecting students with our society. By integrating science students with society, skilled manpower can be mobilised in society through internships. Science and industry should be linked through internships in our industries. Our laws and policies should help us accordingly.

How difficult is it to work as a scientist in Nepal?
The job of a scientist is to dig deeper and find out new facts by doing research. Nepal lacks the necessary infrastructure for scientists. I've studied chemistry, but I don't have even the basic tools that I need. It is not that there are no scientists in Nepal. There are many. But they do not have the necessary infrastructure. There are no laboratories. We are trying to create an environment where laboratories and equipment can be managed. I am also affiliated with the Research Institute for Bioscience and Biotechnology. It also has a campus called Biomedicom. Based on research conducted by this institute, we have also opened four-five companies. Similarly, we are conducting research on cancer cell biology in collaboration with Bhaktapur Cancer Research Center.

You have visited different places in Nepal in the course of your research. What should be done for the upliftment of women in Nepal?
First of all, our society has to believe that women in Nepal can do the same as men. Women in rural areas have worked in very difficult conditions. Their experience and knowledge are more than the women of the city. The government has promised collateral-free loans for women entrepreneurs. But women in rural areas have not received that facility because there are various practical hurdles. They dare to take the risks, but they are deprived of the opportunity to take risks. They are made to be fearful. What they need are support, goodwill, and encouragement. Even today, women have not been able to get a fair price for medicinal herbs, Mithila paintings, and hand-knotted items, among other products.. Women do not get even half the price that these products fetch in shops in Kathmandu. Thus, there is no incentive for them to pursue that skill. Labour must be respected. Their knowledge also has to be institutionalised. We need to make arrangements to certify that they have skill to teach others so that they get benefited financially. For that, the government has to make arrangements for the marketing of such products. The country prospers only when women are financially strong.

How can goods produced by women get a fair price in the market?
The profit-sharing model can be used to reduce this huge difference in price. The government goes for monitoring and says that one can keep a profit of only 20-30%. But traders are looking for 35% profit. They keep a margin of up to 200%.

You are also affiliated with the Federation of Women Entrepreneurs Associations of Nepal (FWEAN). What kind of role does such an organisation play?
Our organisation has envisioned setting up a business development centre. I am taking a coordinating role in that. The middleman system is harassing not only women but also men. To reduce this, we have been providing various types of legal advice to new entrepreneurs through our help desk and a guidebook. If needed, we bring experts from outside. Further, we have a wean biz portal through which we plan to brand and market goods produced by women entrepreneurs.

In order to get bank credit, entrepreneurs must present an accounting of their transactions in the format prescribed by banks. What role can organisations like FWEAN play to facilitate women entrepreneurs?
Banks also need to take risks to promote women's entrepreneurship. My request is, do not to discourage women even if you can’t encourage them. Some banks even discouraged me initially. FWEAN has been assisting women in preparing documents for business registration.

We, at New Business Age, have also tried to support women entrepreneurs through training and interactions in many districts. But we have not found the participation of women entrepreneurs as expected. What should be done to increase participation?
Women have a lot of things to do - they run the family and take care of children. The women of the village are also engaged in farming and raising livestock. The family should help them in such work. They cannot leave the work they do today to pursue future benefits. People like me who live in the city have the same problem. If society encourages women entrepreneurs, they can participate in training and seminars.

It is very difficult for women entrepreneurs to manage time. How do you manage your time?
My husband has the most important role in my time management. Similarly, I have been getting the support of my in-laws as well. It all depends on one’s hunger to pursue entrepreneurship. I think one needs to find a balance between business and family work. For family work, a family member can step in when the other is away. We now have a babysitter. But it may not be practical for everyone to have a babysitter. We need to see if we can make the best use of the time we have saved to pay for services like babysitting.

You said that women entrepreneurs have two main problems. First, the bank does not trust the loan. What should be done to win the bank's trust? The second is how to manage time? Do you have any suggestions on this?
In order to win the bank’s trust, women entrepreneurs need to brand and market their products well. They should be able to find a market for their products. They need to develop the ability to sell. We don’t see this in many women entrepreneurs.

Family support is needed to manage time. You have to create your environment to get support and encouragement from your family. When a woman starts earning money at home, things start to change.

What do Catalyst Technology and Herveda Botanicals do? What is the relationship between these two?
Catalyst technology was started after I returned to Nepal from the United States. While in the US, I used to design and improve chips used in phones. I continued this work even after coming to Nepal. I used to lead Singapore-based engineers and scientists from here in Kathmandu. Every 10 days I would go to Singapore to work. While in Nepal, I started visiting rural areas in the course of my work. During the visits, I found a huge difference in the value addition of herbs. I saw our herbs being exported at cheap rates. I saw the need for a drastic improvement in the supply chain. I also worked with the Ministry of Industry, Commerce, and Supplies to address the issue.

After seeing many opportunities in this sector, I quit my active job abroad and assumed the role of a consultant. Then I started a company called Catalyst Technology, whose main purpose is to show that science and technology can solve market problems. From this, I started conducting research on medicinal herbs. I also started doing research in collaboration with the Research Institute for Bioscience and Biotechnology. I also brought some research grants from that institute. Catalyst Technology focuses on solving market problems through science. In the meantime, we have made natural preservatives for some companies. After using our preservatives, their products like milk and milk solids lasted for 30 to 60 days, up from two-three days.

Herveda Botanicals produces skincare products that are made from herbs using our native skills and knowledge. These goods are of export quality. We include our ‘Nepali story’ in products exported outside Nepal. Herveda Botanicals aims at making Nepal known to the world by exporting quality production.

How did you come up with the idea of producing skincare products?
Research and discovery won’t mean anything if they can’t be used commercially through the production of goods. Many such types of research have been conducted here too. But we have not seen commercial use of such research. Nepal is home to various herbs. But we have been importing foreign skincare products. We know these products are not of high quality, still, we are importing and selling them in large quantities. Looking at all these, I saw a space for quality skincare products in the domestic market. Personal care items are one of the most imported items in our country. We have also started the production of such goods seeing that it can be done immediately and even in small quantities. Other products are also in the pipeline. We purchase herbs directly from farmers; there is no room for middlemen. We also purchase herbs from community forest user groups. There is a cooperative of women forest users in Surkhet. We also buy herbs from them.

What is your role in sustaining the herbs cultivated by farmers and found in forests?
We aim to facilitate farmers for seeds and saplings. We are unable to do it right now because we are a very small company.

How much have you invested in your company? How many are employed in your company?
We started with a small investment. But over these three years, around Rs 10 million has been invested in Herveda. I have used my savings in the company. It is not that my family was not supportive. I just wanted to do something on my own. I had to mortgage some jewellery to secure bank loans. The company has started paying me a salary recently.

Herveda currently employs 10-12 people. Around 100 are working for us indirectly. Further, many produce products like soap at their home for us.

Did you get all the needed workforce in Nepal?
All the workers in Herveda are Nepalis. Most of the products that we need are sourced in Nepal itself. We are bringing some chemicals from outside as they aren’t available here. We are using software developed in Nepal because such products are cheaper. We take support of startups as and when needed

What are your plans?
Our goal is to become a quality certifying agency. There is no such institution in Nepal. In the lack of quality certification, foreign buyers are returning some products exported by Nepal companies. We are focused on the production of skincare products at present. We plan to make spin-off companies produce nutraceuticals and therapy products in the future.

We are also thinking of putting in place a mechanism to preserve the ecosystem of raw materials that we collect from farmers and forests. It may take many years to do so.

Finally, what is your suggestion for new entrepreneurs?
Women must have the full support of family to become successful entrepreneurs. They need to have a risk appetite and leadership skills. For this, they have to learn from other women entrepreneurs by participating in various training and programs. They need to develop the ability to be clear about what they are trying to say and be able to influence others by their actions. 

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