Shift in Entrepreneurship Dynamics

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Shift in Entrepreneurship Dynamics

BY NewBiz Team

In a nation where entrepreneurship has historically been dominated by men, the Nepal Distributive Trade Survey 2022 has unveiled intriguing statistics: women now account for 26% of ownership in wholesale and retail businesses.

The survey conducted after a 12-year hiatus indicates that, in addition to ownership, women's involvement in distributive trade has broadened, with females now representing 35.73% participation in the wholesale and retail sectors.

Women entrepreneurs face a multitude of challenges, ranging from an unsupportive policy environment that neglects their specific socio-economic needs to restricted access to credit, business services, and a deficit in managerial skills. Nonetheless, the survey conducted by the Nepal Statistics Office indicates that despite these obstacles, women are progressively involved in business endeavours.

The highest ownership of businesses by women was observed in Gandaki Province, where 35.1% of the establishments are female-owned. Bagmati closely follows, with 31.3% percent of businesses owned by women, ahead of Koshi (31.7%), Karnali (24.8%), Lumbini (21.5%), Sudurpaschim (18.5%) and Madhesh (10.8%).

According to the survey, retail trade demonstrates a significant presence of women as owners, with 26.9% retail trade establishments owned by women. Similarly, 15.9% of wholesale trade and 7.9% of motor trade establishments were led by women.

One of the surprising findings of the survey is that Karnali Province is ahead of other provinces when it comes to women's engagement in distributive trade. The survey shows the highest percentage of women engaged in distributive trade were in Karnali province. On the other hand, the survey indicated that women's involvement in distributive trade was lowest in the Madhesh province.

The store curates a wide range of food items prepared by using organic ingredients that showcase the unique gastronomic heritage of both eastern and western Nepal.

One of the reasons for a significant increase in women's participation in distributive trade in Karnali Province, according to experts, is that most men from Karnali migrate to neighbouring nations for work. However, they raise a cautionary note. They suggest that while regulatory incentives like registration rebates, income tax reductions, and remuneration income have spurred the trend of women registering businesses, the degree to which these ventures are truly managed or run by women is uncertain. Many women, though registered as entrepreneurs, do not operate the ventures as most of these enterprises are either run by their husbands or another male family member, they say.

Anthropologist Dr Suresh Dhakal said that the advancement of women's involvement in business hinges on both enhancement and awareness. "It's evident that women's capabilities are on the rise," he noted. "With their growing engagement in education and other spheres, they are increasingly inclined to venture into business. Simultaneously, a considerable number of men are working abroad, creating both necessity and opportunity for women to step into diverse fields. Consequently, women have begun to engage in business despite facing challenges such as limited financial access and capital."

Madhesh Province hosts the largest number of unregistered businesses with 51.77%, while Bagmati Province boasts the highest number of registered businesses (75.30%).

According to Dhakal, women's engagement in business has surged due to their self-reliance and growing economic consciousness. He contends that the realisation of the importance of financial independence and self-sustainability has propelled women in this direction. "Furthermore, government and non-government organisations initiating small-scale enterprises and trades specifically for women, along with facilitating their involvement, have bolstered women's presence in the business realm," Dhakal explained. “The practice of obtaining loans from women's groups and establishing small businesses has enabled them to participate in market and economic endeavours which is contributing to their increased participation."

32% of businesses operating sans registration

Approximately 32% of business establishments engaged in wholesale and retail trade across the country are operating without registration. Only 68 percent of wholesale and retail business establishments are officially registered with government agencies. 

According to the survey, 1.130 million individuals are engaged in the wholesale and retail trade sector, with 36% being women (403,964) and 64% men (726,681) . 

Madhesh Province hosts the largest number of unregistered businesses with 51.77%, while Bagmati Province boasts the highest number of registered businesses (75.30%). 

Among the three trade categories, a significant 93.6% of wholesale trade and 77.5% of motor trade are operating with government registration. In contrast, a notable 33.4% of retail trade establishments are operating without formal registration under any regulatory authority.

The findings also show that the majority of business people, accounting for 88.65%, are involved in the retail trade industry, while 5.8% are associated with the motor trade and repair industry, and 5.54% are engaged in the wholesale trade industry. 

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