– This article was originally published by Ayushma Maharjan in the Himalayan Times on the December 09, 2018.
Economic growth and prosperity is only possible when the slope of the economic activities rises. Countries which have been able to create proper grounds for development of innovative enterprises, are the most developed countries in the world today. Economic growth and prosperity have a direct and positive relation with the volume and innovativeness in the economic activities of a nation. However, Nepal is one of the weaker performers on this front.
Despite being a low-income country, Nepal has tremendous opportunities for aspiring entrepreneurs who wish to get out of their comfort zone and take calculated risk to earn profit. In fact, the recent developments in entrepreneurship, with the ever-increasing number of startups in the country, is commendable. However, it also is imperative to mention that many startups have exited from the market within a span of five years of commencement. This, attributes towards an argument that the internal environment of the country persists of disincentivizing factors which is not allowing entrepreneurship spirit to flourish to its actual potential, and scale-up.
A myriad of impediments to growth and flourishing of entrepreneurship exists in Nepal:
Starting a Company
The foremost difficulty faced by an entrepreneur lies in company registration. The entrepreneurs opined that there lacked streamlined standard protocol on how to register an enterprise as well as how to carry out other legal issues to start a company. Similarly, they also identified that the existent policies don’t align with the changing times and hence aren’t progressive. For example, the registration of an e-commerce business is very difficult as the Office of Company Registrar does not recognize e-commerce under any category. Moreover, there exists politicization and control in provision of licensing and permits in numerous profit- making business spheres.
Access to Finance
Entrepreneurs stated that in the burgeoning startup ecosystem, financing is only available at large scale while it isn’t easily accessible for small businesses. Despite having new and innovate business ideas conventional financial institution often hesitate to take risk to invest in startups. Entrepreneurs also alleged that the scope of potential investment in the companies are limited as sources like crowdfunding, private equity financing, venture capital, and other profitable financing alternatives haven’t been legally recognized. Intellectual Property Right A pivotal problem identified by budding entrepreneurs is the protection of intellectual property- in the form of patents- due to which they are threatened to put forth their ideas to the mentors during acceleration programs. This thus, cumbers innovative ideas to shape amongst startups.
E-Commerce and E-Financing
Another issue raised by the entrepreneurs was that, even though FinTech is growing apace, Nepal has not been able to employ the electronic transaction system in any sphere of operation. Most of the buying, selling and other financial undertakings are done physically and not electronically. Since, Nepal does not have e-payment friendly policies, international payment gateways haven’t been able to enter the Nepalese market. Furthermore, many companies illegally operate e-commerce activities through social media websites like Facebook and Instagram which translates to injustice to those entrepreneurs who try to operate under the regulation of the Nepal Government.
Entrepreneurial Education Reform
Furthermore, the entrepreneurs believe that there is a need to reinvent the entrepreneurial education module to pave way for a broader entrepreneurial mindset. The current curriculum taught in most of the business schools not only is long-standing but also is regressive with very less emphasis on practical entrepreneurial education. Even though an increasing number of entrepreneur programs exist today as compared to a decade ago, these educational institutions haven’t been able to leverage these opportunities for the benefit of the students. Moreover, the education system in Nepal does not recognize vocational education and training as an important aspect which can influence employment, entrepreneurship, job creation and innovation, due to which its development is very minimal.
It is irrefutable that entrepreneurship development is a fundamental precondition for a burgeoning and a prospering Nepal. However, the economy is plagued with myriad challenges and obstacles that prevent the creation of a conducive environment for doing business. Therefore, all stakeholders, mainly the government and the private sector, need to collaborate and coordinate their efforts to promote entrepreneurial development.