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Roundtable discussion on “Overcoming Barriers to Growth Entrepreneurs”

29 November 2022: South Asia Watch on Trade, Economics and Environment (SAWTEE) conducted a roundtable discussion on “Overcoming barriers to growth entrepreneurs” to examine the present state of and gaps in the support system in Nepal for startups and growth-potential existing businesses, including those eyeing export markets. The objective of the discussion was also to identify the types of focused support needed for startups and how different support agencies from private and public sectors should be engaged to build a well-connected ecosystem to help startups to grow.

In his presentation, Mr. Shashi Bhattarai, Co-founder and Director, Knowledge Holding International Pvt. Ltd., highlighted the dearth of incubators at academic institutions in Nepal. This has not let the startup and entrepreneurship culture flourish, he said. He called attention to the need to distinguish between SMEs and startups at the policy level. He pointed out the need for diagnosing factors such as policy, market, finance, culture, and human capital to create and enable an innovation and entrepreneurship ecosystem. Enabling stakeholder networks amongst entrepreneurs, universities, government, and corporate sector is important to grow and sustain the entrepreneurs, he further elaborated.

Mr. Prem Luitel, Under Secretary (Industry), Ministry of Industry, Commerce and Supplies, mentioned that the government is parallelly drafting the Startup policy and SME policy to assure a healthy ecosystem for startups and business ventures to grow. He said that frequent transfer of government employees from one department to another department hinders specialization and consistency in policy-related works. Mr. Luitel mentioned that the government started the startup challenge fund in year 2077 in which selected enterprises were supposed to be rewarded with cash grants, which the NPC altered to subsidized loans. Unfortunately, the Challenge Fund has not been made any investments yet. Highlighting the efforts of the government, Mr. Luitel also mentioned the existence of collaborations between government and universities like Pokhara University and Tribhuvan University to invest in fostering a culture of innovation and entrepreneurship. 

Mahalaxmi Shrestha, General Secretary, the Federation of Women’s Entrepreneur Association of Nepal (FWEAN), emphasized that the biggest challenge lies in scaling the business. She added that complicated compliances in registration, scaling and other basic processes of business have compelled the entrepreneurs to operate through informal channels. Ms. Shrestha recognized the need to build the capacity of budding entrepreneurs, women, and youths to reduce the knowledge gap. She placed a strong emphasis on the necessity for business owners to be informed about digitalization, digital marketing, financial analysis, and investment opportunities.

Dr. Bim Prasad Shrestha, Professor, Kathmandu University, emphasized the idea of creating more job creators than job seekers. He even ideated the need for a different ministry to look upon startups rather than limiting them to the Ministry of Industry. The professor also discussed how collaborations between the government and universities can change the entire entrepreneurial ecosystem. He highlighted that KU as a leader in the education sector of Nepal has continuously helped the startups in the agriculture, health and energy sectors with various grants and incentives.

Ms. Shreya Upadhyay, Co-founder, Sweet Fix, opined that access to finance is the biggest challenge for growing entrepreneurs. The fund ceiling of NPR1.5 million provided by the government for women may not be enough to scale for many businesses, she said. Ms. Upadhyay also pointed out that inclusive networking and mentoring programmes also play a big role in today’s time. 

Dr. Tri Ratna Bajracharya, Director, Innovation, Entrepreneurship, and Incubation Centre, Institute of Engineering, TU said that entrepreneurs and startups are not merely confined to students and learners of business studies. Entrepreneurs can be grown from diverse fields. We just need a good platform to incubate diverse ideas, he further stated.

Ms. Salonika Singh, Commercial Banking Expert, expressed the disappointment that banks are not giving enough attention to support startups. She also stated that the loans offered by the banks are being misused. Therefore, revisiting the loans and the credit lending process must be done, she added. 

Mr. Sudeep Bajracharya, Senior Business Opportunities Manager, USAID KISAN II Project, while talking from the agricultural point of view mentioned that raw materials have become just as crucial as access to financing. Highlighting the need for standardization of goods and services, Mr. Bajracharya mentioned the need for raising awareness among farmers and producers so that there won’t be problem in meeting the export criteria. He emphasized a holistic approach to supply chain.

Mr. Nidhaan Shrestha, Investment Director, True North Associates, said that startups are not just about products. They are innovation fueled by both invention and commercialization, he added. He further made a point that startups are business models that can scale beyond borders whereas SMEs are limited within a border. Operation of startups in grey spaces is fine. Once they grow up, they can come under regulatory parameter, he added. 

He also pointed out that the entrepreneurship culture has been romanticized in Nepal. He emphasized that entrepreneurs should be informed about business terms, tools and techniques and they should put an effort on learning skills. Entrepreneurs seeking for funds need to assure investors that their idea/ business can be commercialized, he continued. Mr. Shrestha also recommended entrepreneurs to follow the approach of innovative finance instead of traditional finance.

Mr. Gaurav Kandel, Consultant, Shark Tank Nepal, talks about how television reality shows like shark tank helped in many countries to flourish the culture of startups and entrepreneurship. Bringing that to Nepal will empower growing businesses of Nepal, he further added. 

Dr. Posh Raj Pandey, Chairperson, SAWTEE, moderated the discussion. The roundtable saw the participation of entrepreneurs, professors, government representatives and finance and investment experts. 

Background Note