Koshi Province Sees Startup Growth, Backed by Rs 2.56 Billion Investment: NRB Report

Startup activity is gaining momentum in Koshi Province, with a large share of enterprises concentrated in agriculture and forest-based businesses, according to a special study conducted by Nepal Rastra Bank (NRB) in fiscal year 2024/25.

The study shows that most startups operating in the province focus on agriculture and forestry, followed by manufacturing, services, tourism and information technology.

NRB prepared the report by collecting data from 160 startup enterprises that had applied for startup loans through the Industrial Enterprise Development Institute and were shortlisted for financing.

Among the surveyed startups, 41.3% were related to agriculture and forestry, followed by manufacturing (18%), services (17.5%), tourism (13.8%) and information technology (9.4%). In terms of business potential, 43.1% of respondents identified agriculture and forestry as the most promising sector for startups, while 21.3% prioritised tourism.

Geographically, 107 startups, or 66.9%, are based in the Tarai, while 36 enterprises (22.5%) operate in the hill region and 17 (10.6%) in the Himalayan region.

Entrepreneurs aged 36 to 50 account for the largest share at 44.4%, followed by those aged 21 to 35 at 39.3% and those aged 50 to 70 at 16.2%. Male entrepreneurs make up 74.4% of startup owners, while women account for 25.6%.

According to the study, 54% of startups have introduced innovation in products and services, 41% in production processes and 5% in distribution. In terms of technology use, 27.5% of enterprises use advanced technology, 65% use basic technology and 7.5% do not use technology at all.

Rs 2.56 billion invested in 160 startups

Total investment in the 160 startups in Koshi Province has reached Rs 2.56 billion, with 61.3% coming from promoters’ equity and 38.7% from loans.

In fiscal year 2023/24, these enterprises generated employment for 1,436 people, of whom 48.4% were women and 51.6% men. During the same period, the average capacity utilisation stood at 71.4%, while 80% of the startups were profitable and 20% reported losses.

Total sales revenue amounted to Rs 926.4 million, while total profits reached Rs 129.2 million. The average profit margin of startups stood at 13.9%, with an average return on investment of 5.7%.

Among the startups, 46.9% primarily serve the national market, 45% the local market and 8.1% the international market. For marketing, 33.9% rely on networks of friends and relatives, 28.3% use social media, 8.5% use websites, while the rest adopt other methods.

The study report says entrepreneurs in the initial stage faced challenges such as a lack of capital (32.7%), shortage of skilled manpower (20.4%) and inadequate skills and knowledge (14.5%). During operation, limited access to investors and skilled workers, market competition and technological constraints emerged as major challenges.

The NRB study underlined the need for seed funding, co-investment models, venture capital, tax incentives, removing legal hurdles and easier access to credit to promote startups. It also recommended expanding incubation centres, targeted incentive programmes, skill development training, research and technical support at the federal, provincial and local levels, while strengthening public–private collaboration.

The study indicates that startup entrepreneurship is expanding in Koshi Province and suggests that with appropriate policy support and infrastructure development, the sector could become a key driver of economic growth and job creation in the province.