What is your assessment of the impact of the Covid-19 pandemic on micro, small and cottage industries (MCSIs)? What challenges are MCSIs currently facing just to survive?
The Covid-19 crisis has had a restricting impact on achieving the target of developing sustainable micro, cottage and small industries (MCSI) in Nepal. The pandemic has hampered the functioning of economic activities and industrial output has fallen due to the lack of imported raw materials, supply disruptions, lack of labour mobility and traffic restrictions. The lockdown has had a direct impact on the jobs and earnings of a large segment of society, which reduces consumer demand for goods and services. Consequently, industries are operating much below their production capacity. This will lead to an increase in industrial waste, thereby reducing the operational efficiency and sustainable industrial operations.
What type of immediate government support do they actually need to stay afloat in the current situation?
The focus of all levels of the government is on containing the spread of coronavirus. Thus, the situation of MCSI sector in Nepal is very critical; the government hasn't been able to launch meaningful business recovery programmes to overcome the challenges related to unemployment and economic slowdown. Relief measures have been announced in the current fiscal year’s budget and the monetary policy for the cottage industry and SME refinancing for certain sectors including tourism and agriculture. But whether these businesses are actually benefitting from the refinancing remains a big question. Some entrepreneurs have benefitted from the measures, but many haven’t also because of the lack of information about the financing procedures.
What should the strategy be on the road to recovery for MCSIs?
The government needs to review the measures that have been announced earlier and make decisions considering a timeline to revive the market for MCSIs. An expert discussion could bring some feasible policy options for consideration. The strategy of the recovery should be focused on optimal utilisation of available resources, domestic technology development, re-financing and subsidy on bank interest rates.
Low level of digital literacy seems to be one of the major hurdles for MCSI owners to get along post-Covid. What should be done to make them digitally literate so that they can make good use of the web platform?
In advanced countries, even small businesses nowadays employ digital techniques such as search engine search engine marketing, content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimisation, e-mail direct marketing, display advertising, e–books etc, to reach out to their targeted customer groups. While using all these techniques may not be possible in our context at present, the past one year has shown that going digital is the way forward for small businesses in the country. The government and other stakeholders should provide training and organise awareness campaigns in this regard.
How do you think the challenges could be translated into opportunities for MSCIs? What type of ecosystem is needed to broaden the horizon to capitalise on the available business opportunities?
As I said earlier, our focus should be on using IT much to the extent possible. The government needs to come up with a comprehensive strategy to realise this potential. From manufacturing, services to agribusiness, utilisation of advanced technologies can open new doors of opportunities. We need to use the economic recovery as an opportunity to boost our technological advancement. Training, research and development will be important to achieve visible progress. It is likely that skilled workforce may leave the country seeking opportunities abroad once the pandemic is over. Thus, the government and central bank should come up with plans to protect industries not only now but also post-Covid.