Building resilient businesses: Lessons from 2020
The past year has shown us that transitioning business models to adapt to the “new normal” was vital for survival during the COVID-19 pandemic. Now, as vaccines roll out and we enter a new phase, businesses are shifting focus toward recovery and continuity. Some activities may have changed irreversibly, while others will need restoration or revamping.
Looking back, change and adaptability were key factors in ensuring business longevity throughout 2020. But what does this next stage look like?
Many organizations have moved beyond crisis management and are now focused on recovery and business continuity. Here are four major approaches to reflect on that may help your business better adapt to ongoing risks in this dynamic environment.
1. Revisiting Business Plans
The first step might be revisiting your business plan. The COVID-19 pandemic drastically altered many aspects of the business environment, disrupting existing procedures, demand, and supply patterns.
Under these new conditions, many business ideas may no longer be relevant or may require significant revamping. It’s important to reconsider consumer behavior and preferences, pricing strategies, delivery and logistics, scale of operations, and more.
Planning and documenting these changes through an updated business plan can help pave a clear way forward.
2. Pivoting Service and Product Offerings
Alongside revisiting your business plan, the uncertainty of the current environment calls for backup plans to improve your chances of survival and growth. Having a Plan B—or even Plan C—can make a significant difference.
Because demand for particular services may fluctuate rapidly, exploring alternative offerings or expanding your current product or service range could ease your return to growth.
For example, during the lockdown, Daraz, an e-commerce platform in Nepal, partnered with a leading grocery store to deliver essential goods. Similarly, Foodmandu expanded its service to include fresh vegetable delivery along with food, ensuring continuity when their original services faced challenges.
Using tools like the Business Model Canvas can help assess the viability of pivoting strategies. Who knows? You might discover a more lucrative or sustainable business model in the process.
3. Reassessing Operations Management
Some businesses thrived during the pandemic due to flexible, efficient, and system-driven operations. Others struggled to respond and adapt.
If your business faced difficulties, it might be time to reassess and build a more resilient operations model.
Reviewing your operations can improve efficiency by standardizing processes and building capacity throughout your organization, ultimately boosting overall productivity.
Conducting organizational assessments to identify pain points, gaps, and areas for improvement can help develop the right action plan. This can minimize the impact of future disruptions like COVID-19 on your business growth.
4. Re-Planning Finances
The pandemic had a major impact on many businesses’ financial health, making former financial plans obsolete or in need of revision.
This situation underscores the need for proactive financial risk assessment and re-planning.
With updated business plans, budget allocations may shift, and financial resources may need to be redistributed across different areas.
Careful planning and execution of these financial changes are essential for success.
A robust financial model will support strategic decision-making by providing a clear picture of your current financial status and setting future targets.
At Biruwa Advisors, we aim to help businesses better adapt to the changing world under and post-COVID-19. Our expertise includes research, business plan development, operations management, and financial analysis.
If you need assistance or simply want to discuss your plans, feel free to reach out. We’re also proud to offer free one-to-one mentorship sessions as part of our CSR initiative, where entrepreneurs can discuss their ideas and gain an independent perspective from our experts.
Business Continuity in Nepal during Lockdown
The COVID-19 outbreak prompted many companies in Nepal to initiate remote working for their staff. However, working from home has proven challenging for some, especially as the pandemic forced people into extended periods of remote work. The impact of COVID-19 has touched a wide range of businesses across Nepal.
“Employees are not able to perform 100% from home due to their mental state, environment, resources, data, etc.”
— Chhitiz Kiran Shrestha, Management Consultant
For many Nepalese, the biggest challenge in transitioning to remote work is the loss of routine that usually exists in an office setting. It becomes difficult to determine when to start and stop working. As Shashank Shrestha shares, “My team is performing well at home, but all of them have reported either underworking or overworking.” Maintaining focus throughout the day is another major challenge. Chhitiz Kiran Shrestha further explains that employees’ mental state, home environment, resource availability, and data accessibility all influence their ability to perform effectively from home.
Internet Connectivity Struggles
Following the lockdown, slow internet connectivity has emerged as another challenge for remote workers. With most people confined to their homes, internet usage has surged, putting pressure on service providers and leading to bandwidth issues.
Economic Impact on Motivation
Nepali businesses are also increasingly concerned about the economic fallout from the pandemic. According to Chhitiz Kiran Shrestha, “Organizations are concerned about the economic aftermath, so they are not willing to pay 100% to their staff.” This understandably affects overall motivation levels within organizations.
Despite these hurdles, many businesses continue to operate. To gain insights into how businesses and startups in Nepal are navigating this difficult period, Biruwa Advisors connected with entrepreneurs and team members through personal conversations, emails, and social media platforms. Below, we share key learnings that can help guide or reaffirm your approach during this time.
Defining Your Modus Operandi
The first step in moving forward is defining how your organization will operate under current conditions. This clarity helps teams understand the organizational direction amid ongoing challenges.
“Startups should try to define structure within this chaos. Foodmandu is using top-down communications with everyone within and outside the organization to coordinate our work.”
— Nidhaan Shrestha, CEO, Foodmandu
Drawing from past experiences such as the earthquake and blockade, it’s advisable to outline work structures and remain open to adjusting them to overcome operational challenges.
Communicate and Stay Connected
For organizations that continue their work, communication is a top priority. In this period of isolation, communication fosters clarity and confidence among team members and clients alike.
Some organizations have implemented daily team meetings to stay updated on progress and developments. Where physical presence is impossible, various digital communication channels help keep everyone informed.
Embrace Technology
Technology has played a pivotal role in ensuring business continuity. Roshan Joshi, Digital Marketing Manager at HLE Nepal, a BPO with over 150 Nepal-based team members, notes, “As a marketing team, we’re using JIRA as a project management tool and Google Hangouts for video calls. So far, so good.”
Similarly, Avigya Karki from Muna Agro Enterprise Group credits technology tools like Skype, Viber, and Zoom for enabling seamless communication across factories and production sites. Younger team members often assist in exploring and adopting new technology options.
Businesses that have adapted to use technology effectively for customer relations and service delivery are the ones continuing to thrive during this crisis.
Switch to Cashless Banking
While part of technological adaptation, cashless banking deserves special mention due to its significant impact on business processes.
Biruwa Advisors adopted online banking in early 2017 and has been utilizing digital banking services for company operations and staff payments.
Popular digital payment platforms such as eSewa, Fonepay, Khalti, and Connect IPS are widely used by organizations to handle various payments, including salary disbursements during lockdown.
Focus on Organizational Development & Management Systems
The lockdown and remote working have freed up some team members’ time, presenting an opportunity to tackle internal tasks often deprioritized during normal operations.
Organizations can focus on updating policies, streamlining workflows, and documenting additional procedures to strengthen management systems.
This is also a crucial time to strategize for potential post-lockdown scenarios and prepare accordingly.
Prioritize Work-Life Balance
Many individuals have reported either underworking or overworking while working from home. Organizations should experiment with different approaches to keep team members engaged without risking burnout.
Encourage your teams to take breaks, set aside weekends for personal time, exercise, and pursue hobbies that may have been neglected before.
Since working from home blurs the boundaries between office and personal life, it’s important for employees to consciously step away from their desks regularly.
11 Ways to Become a Work from Home Wizard
In recent years, working from home has steadily increased worldwide. But today, the global spread of COVID-19 has forced people into remote work for an indefinite period. The Government of Nepal has urged citizens to stay home unless absolutely necessary, encouraging working from home wherever possible.
While working from home comes with many perks, it can also be challenging, especially for those new to the setup. To help you make the most of your remote working arrangement, I researched and gathered some practical tips and advice—many inspired by Nepali social media users and online resources. Here’s a rundown of eleven essential tips to make working from home a success.
1. Create a Dedicated At-Home Office
Though tempting, working from your sofa or bed with a cup of chiya won’t boost productivity. Setting up an active, dedicated workspace encourages organization and helps you get into the right mindset for work.
“One of the top things for me to be productive and a good team player is to have a dedicated workspace,” says Tridev Gurung, a remote software engineer at The Bank of New York Mellon.
Keeping your workspace clean also helps maintain focus.
2. Get Dressed
Getting dressed not only prepares you mentally for the day but also ensures you’re ready for any unexpected virtual meetings. Changing out of pajamas is a small but important ritual. Likewise, changing out of work clothes at the end of the day signals to your brain that the workday is over.
3. Set Your Work Hours
Some people thrive by sticking to traditional office hours, while others prefer a more flexible schedule. Identify when you’re most productive and plan your work hours around those peak times. The key is to focus on getting things done effectively and efficiently, not just clocking hours.
4. Establish Boundaries
Set clear boundaries with family, roommates, friends, and even pets during your work hours to minimize interruptions. With everyone confined to home, distractions are common. If you have young children, plan work around their naps or quiet times to maximize focus. Also, remember to spend quality time with your loved ones after work to maintain a healthy balance.
5. Structure Your Day
Develop a daily routine by setting specific work hours and updating a to-do list every morning. Organizing priorities, tasks, and deadlines can help maintain your focus and productivity throughout the day. Use planners, calendars, or digital tools to keep track.
6. Avoid Over-Committing
It’s easy to overestimate what you can accomplish when working from home, which can lead to burnout and reduced output. Commit only to tasks you realistically can complete in a day without undue pressure.
7. Take Short Breaks at Regular Intervals
Although it might seem counterintuitive, taking short, frequent breaks improves productivity more than fewer, longer breaks. Use breaks to move around and give your eyes a rest from screens.
Beware of social media distractions—consider using it as a reward after completing high-priority tasks to maintain focus.
8. Communicate Regularly with Team Members
Beyond emails and instant messaging, schedule regular check-ins through phone or video calls using tools like Skype, Viber, or WhatsApp.
As Supriya Karki noted on Twitter, “I am usually more active when I do work from home. First thing is we need to make communication with colleagues we are working with and be available.”
Don’t forget to socialize informally, like you would in an office, and keep your team updated on your schedule and task progress.
9. Stay Physically Active and Healthy
Lockdowns and curfews mean many of us are homebound, which can reduce physical activity. Staying active is crucial for both physical and mental health. Harvard researchers confirm that the immune system functions better with good nutrition, sleep, and exercise.
Exercise includes not just yoga or workouts but also daily chores like cooking, cleaning, and gardening—all moderate physical activities that boost health, reduce stress, and increase energy, leading to better focus and productivity.
10. Protect Your Mental Health
The pandemic affects mental well-being, especially for those with pre-existing conditions like anxiety or OCD. The sudden shift to remote work can be mentally distressing. If you feel overwhelmed, seek support from professionals or helplines.
Make mental health a priority alongside physical health during this difficult time.
11. Celebrate Your Wins
At the end of each workday, review what you have accomplished. Tracking your achievements helps maintain motivation and builds confidence for future work-from-home days. Celebrating even small wins creates a positive cycle of productivity.
Market Research- A Tool for Business Guidance
Running a business without adequate market information is like driving a car with a foggy windscreen — progress is slow and uncertain. Market research is an invaluable tool because it provides detailed insights into customer demographics, demands, market trends, and competitor analysis, enabling better decision-making.
Whether you are planning to launch a new product or service, scale your existing business, or simply improve your operations to gain a competitive edge, market research plays a crucial role.
Why Many Businesses Miss the Mark
Too often, businesses rush to sell their products or services based on the instincts of a few key individuals rather than proper market understanding. Without a clear grasp of the market and its stakeholders, such efforts often fall short.
Five Reasons Market Research is Important Throughout the Business Lifecycle
1. Better Understanding of Your Customers
Businesses that deeply understand their customers tend to outperform competitors. Market research helps identify your target customers’ needs, preferences, purchasing behavior, and expectations. With this information, you can tailor your marketing and pricing strategies to better serve your customers, making your business their top choice.
By profiling your ideal customer — considering factors like age, gender, location, and income — you can accurately estimate market size and pinpoint the triggers that drive purchasing decisions.
2. Insight into the Competitive Landscape
The marketplace today is crowded with competitors, making customer acquisition and retention challenging. Market research helps you identify key players and those with growth potential, analyze their strengths and weaknesses, and discover market gaps. Learning from competitors’ successes and failures enables you to craft smarter strategies to capture your target audience.
3. Product Testing Before Launch
Before fully launching a product or service, market testing helps determine if it resonates with your audience. This process highlights potential improvements and mistakes, saving costs and preventing poor customer experiences. While no launch guarantees success, testing provides critical guidance to refine your offering.
4. Staying Relevant in the Marketplace
Bill Clinton once said, “The price of doing the same old thing is far higher than the price of change.” The downfall of once-dominant Nokia versus the rise of Apple and Xiaomi illustrates this perfectly. Successful companies use market research to anticipate shifts and adapt accordingly. To stay competitive, businesses must predict and embrace change before it overtakes them.
5. Cost-Effectiveness and Business Growth
A well-executed market research strategy can identify potential problems before they arise, minimizing risks and saving money. By understanding customer demands and market dynamics, you can optimize your marketing efforts to be more efficient and cost-effective. This fosters sustainable business growth.
Keep an Open Mind
Market research requires openness. Businesses often cling to their ideas and fail to see things from the customer’s perspective. Starbucks disrupted the coffee industry by recognizing that customers sought more than just good coffee—they wanted an enjoyable experience. This insight led to innovations in seating arrangements and store atmosphere, enhancing customer satisfaction.
At Biruwa Advisors, market research is one of our most sought-after services. We are eager to help businesses gain the insights they need to thrive in today’s competitive market.
Different Stages of Coronavirus Outbreak and Popular Myths
Understanding Coronavirus (COVID-19) and Precautionary Measures in Nepal
What is Coronavirus?
Coronavirus is a newly discovered virus causing the infectious disease known as COVID-19. It spreads primarily through small droplets from the nose or mouth when an infected person coughs or exhales.
Four Stages of Virus Spread:
- Imported Cases: Virus enters through infected travelers returning from abroad.
- Local Transmission: Spread to people who have come in contact with those infected travelers.
- Communal Transmission: New infections occur among people with no travel history or known contact with infected individuals.
- Epidemic: Widespread, uncontrolled transmission affecting the entire country (e.g., Iran, Italy, China).
Nepal’s Precautionary Measures to Contain COVID-19:
- Ban on arrivals from affected countries until April 15.
- Minimize movement outside homes.
- Prohibition of gatherings over 25 people.
- Closure of movie halls, stadiums, gyms, nightclubs, and other entertainment venues until April 30.
- Suspension of academic classes until April 12.
- Hotels, restaurants, and shopping malls required to use disinfectants, hand sanitizers, and conduct health screenings.
- Non-essential services by private and public sectors halted; essential services like banking, electricity, food distribution continue.
- Suspension of long-haul transport and all international flights.
Role of Companies and Individuals
Everyone has a responsibility to help minimize virus spread, especially in workplaces. [Link for workplace guidelines]
Fighting Misinformation: WHO Myth-Busters
| Myth | Fact |
|---|---|
| Virus does not spread in hot climates | COVID-19 can spread in all climates and regions. |
| Thermal scanners detect the virus | Scanners detect fever, not the virus itself. |
| Eating garlic kills the virus | Garlic is healthy but does not prevent or cure COVID-19. |
| Only elderly or sick people affected | People of all ages can catch COVID-19; elderly and sick are more vulnerable. |
| Antibiotics cure COVID-19 | Antibiotics treat bacteria, not viruses; they may be given for bacterial co-infections. |
Organizational Preparedness for COVID-19
COVID-19 is an infectious disease caused by the newly discovered coronavirus that causes illnesses such as the common cold to severe respiratory illnesses. People can catch the virus through small droplets from the nose or mouth when the affected person coughs or exhales. The disease is known to have more effect on older people and people with pre-existing medical conditions than other people. Countries around the world are working on developing a vaccine and taking precautionary measures by educating their population and even taking stern actions such as community isolation and travel ban.
Companies and individuals are also equally responsible for the safekeeping of others for which preventive measures need to be adopted to avoid contamination. Companies like Google have established a COVID-19 fund that enables all temporary staff, globally to take paid leave if they show potential symptoms. Amazon announced that it will be offering unlimited sick leave for those who tested positive for COVID-19.
Likewise, companies in Nepal are establishing health screening by checking the temperature of employees before entering office premises and allowing work from home option to those showing early mild symptoms. We drafted this blog to share the knowledge we have gathered through our desk-research and our approach to help other Nepali Startups and SMEs to be prepared.
Recommended Measures
In the light of current circumstances, it is important to maintain effective communication between team members and educate everyone regarding viral infection. Besides, good communication, companies should also provision masks & sanitizers and temperature taking could be incorporated in order to detect early symptoms.
With regards to planning and responding to the coronavirus outbreak, the Centers for Disease Control and Prevention (CDC), USA has prepared guidelines on safe practices for businesses and employers. This guideline is mainly focused on social distancing and maintaining proper hygiene. Some recommended strategies companies can adopt are:
- Ensuring sick leave policies are flexible that permits employees to stay at home to take care of themselves or their family members.
- Encouraging employees having acute respiratory illnesses to stay at home. Any employee showing early symptoms should notify their supervisors and stay at home.
- Employees showing signs of any symptoms or becoming sick upon arrival at the office should be separated from the rest of the employees and sent home immediately.
- Placing posters highlighting cough & sneeze etiquette and hand hygiene in workplace areas to educate employees.
- Providing adequate soap, water and alcohol-based hand sanitizers in multiple locations in the workplace. Also, guaranteeing adequate supply and stock for the same.
- Cleaning frequently touched workplace areas such as desks, doorknobs and attendance monitoring systems.
- Advising employees who routinely travel to check and test themselves with health officials. At the same time, it is important to minimize travel and use of public vehicles.
Our Initiatives
We at Biruwa Advisors, have also developed policies and practices in response to COVID-19 which is to be adhered by all the team members:
Sick Leave/Work from Home
- If any team member shows any mild symptoms of COVID-19 including cough/sneezing/fever, it is recommended to work from home or take a leave of absence depending upon the situation.
- If any team member is feeling ill, but still able to work, “work from home” should be requested through email.
Travelling and Commuting
- In case of an outbreak, team members are discouraged from using public transportation. Instead, ride sharing apps such as Tootle or Pathao should be used for which the office will reimburse the expenses.
- In-person meetings should be done virtually where possible, especially with non-company parties.
- All work trips and events should be cancelled or postponed until further notice.
General Hygiene
- A hand sanitizer should be placed near the entrance, bio-metric and all the rooms in the office.
- A tissue should be used for coughing/sneezing or the mouth should be covered with a sleeve, preferably into the elbow. The tissue should be discarded properly and hands should be cleaned/sanitized immediately.
- Hands should be washed after entering the office from outside, using the toilet, before and after eating, and after coughing/sneezing into the hands. Hand sanitizers can also be used as an alternative.
- Desk tops, electronic items, light switches, door knobs should be disinfected and cleaned every day.
- The office should be stocked with all the necessary supplies including hand sanitizer, disinfectants, paper towels, toilet paper, liquid soaps, surgical masks and other things as required.
- Touching the face, particularly eyes, nose, and mouth with hands should be avoided to prevent from getting infected.
- It is advised to limit the number of people in a room to four.
All the precautionary measures suggested in this blog should be taken seriously and one should regularly update themselves with the recent developments. However, not all information might be reliable. It is therefore suggested to individuals to follow only those information from reliable sources and discard myths.
SME Loans Made Easy – Nabil Bank
Nabil Bank in partnership with UKaid Sakchyam – Access to Finance Program has recently introduced the “Nabil Sajilo Express Karja” (NSEK), a Small and Medium Enterprise (SME) lending product that uses a credit scoring model to determine the creditworthiness of an individual and allows customers to get loan approval within 35 hours. With this, eligible SMEs can receive loans from NPR 15 lakhs to NPR 75 lakhs at an interest rate based on their respective credit scores. This service is an upgrade to the bank’s previous loan facility for SME businesses called “Nabil Sajilo Karja” which allows eligible businesses to draw a loan up to NPR 1.5 crore.
Why NSEK?
With the launch of NSEK, Nabil Bank has taken a step towards improving access to finance for SMEs in Nepal. Eligible SMEs can capitalize on this opportunity and reap benefits from the lending product that includes the following benefits:
- Use of credit scoring model which utilizes a combination of statistical analysis and expert judgement performed by lenders to speedily calculate the probable risk in the business that helps in decision making and pricing loans
- Interest Rate up to 10.50% per annum (fixed for 1 year and based on credit score)
- Loan Size from NPR 15 Lakhs to NPR 75 Lakhs
- Loan approval within 35 working hours with additional 25 hours for security documents execution
- Free issuance of credit card to the key person (limit of NPR 50,000)
- Free Monthly Bank Statement delivery through email
- Free transaction alerts through SMS
- NPR 3 lakh worth of 13 critical illness insurance coverage through Nabil Care*
- NPR 10 lakh of accidental insurance coverage and NPR 75,000 on death by any cause from personal account*
- Conditions applied*
How to apply for the NSEK?
In order to apply for a loan with NSEK, you can visit Nabil Bank’s website and download the application form.
Based on the information in Nabil Bank’s website, interested individuals need the following documents along with the application form:
| Individual Documents | Official Documents | Financial Documents |
|---|---|---|
| 1. Citizenship Certificate 2. Net Worth Statement | 1. MOA, AOA 2. Registration Certificate 3. Valuation Report (if available) 4. Tax Clearance Certificate (in case of existing business) 5. PAN/ VAT certificate 6. Resolution of partners/ BOD for availing: (Banking facilities, authorize loan operation and mortgage, provide undertaking and corporate guarantee) 7. Bank Statement of present bank account 8. Document related to credit facilities availing at present (if availing loan from another bank and if available) | In case of existing business: Financial Statements (Two year audited and/ or three years projection) Tax Clearance Certificate (Compulsory) Business Plan (if prepared) In Case of Startups: Projected Financials for 3 years Business Plan (Compulsory) |
This blog is based entirely on the information provided by Nabil Bank Ltd. on its official website. For more information, please visit Nabil Bank’s website or contact your nearest branch.
If required, Biruwa Advisors can support you in preparing business plan for your startup or existing business.
Government Funds: Loan Support for Entrepreneurs in Nepal (FY 2075/76)
For each Fiscal Year (FY), the Government of Nepal (GoN) sets sectoral priorities in its federal budget. The current government policies are focused towards the promotion of entrepreneurship as it is an important aspect for the sustainable development of a country. Taking this into account, budget has been segregated for subsidizing business loans in order to encourage entrepreneurship, create employment and increase domestic production in Nepal.
For the FY 2075/76 (2018/19), the government, in line with the Integrated Working Procedure for Subsidised Credit 2018, has announced plans to provide interest subsidy on loans for various programmes, including youth self-employment, women entrepreneurship, self-employment for returnee migrants, upliftment of underprivileged community and agriculture and livestock promotion.
Any Nepali citizen above 18 years of age having Personal Account Number (PAN) and not listed as a ‘defaulter’ in any Bank and Financial Institutions (BFIs) can apply for the loan facility, according to the procedures published by the Ministry of Finance (MoF). The term of the loan facility is up to five years and is available at all types of BFIs – commercial banks, development banks, finance companies and micro-finance institutions. The actual size of the loan and instalment is decided by the respective BFIs.
Educated Youth Self-Employment Loan
In order to encourage youths with higher education to start their own businesses, Educated Youth Self-Employment Loan allows youths below 40 years to obtain loan against collateral of their academic certificates.
- Loan Size: up to NPR 0.7 million
- Interest Subsidy: 5% interest subsidy
- Priority Areas: The loan can be taken for agriculture, poultry, irrigation, agricultural tools and machines, forest development and promotion of grazing land as well as land development and conservation
- Special Considerations: The criteria to receive this loan entails the person to hold a university degree, obtained at least 7-day training provided by the government institutions like the Council for Technical Education and Vocational Training (CTEVT) and Cottage and Small Enterprise Office/Committee, Skill Development Training Centre and submission of a brief proposal of the enterprise including how the subsidized loan will be utilized.
Note:
BFIs extending the concessional loan facility to the youth cannot charge more than an additional 2% interest to the grant provided by the government, and they are not allowed to charge other fees except the interest on the loan.
Women Entrepreneurship Loan
This loan scheme was initiated with the motive to fulfill the financial requirements of women in order to encourage them to start a business venture. It allows women to take loan against group guarantee.
- Loan Size: up to NPR 1.5 million
- Interest Subsidy: 6% interest subsidy
- Priority Areas: Not specified
- Special Considerations: To obtain the loan, a brief proposal for enterprise operation should be submitted. Where loan is provided to a group, the group should consist of a minimum of 5 members belonging to different families.
Youth Returned from Foreign Employment Project Loan
This loan was introduced by the government to retain migrant returnees so that they can utilize the skills and experience they have gained abroad. This initiative has received an encouraging response with more and more workers applying for the financial assistance introduced to engage them in occupations within the country. Within a month, nearly 3,000 youths who are experienced in foreign jobs applied for this loan since the launch of the scheme.
- Loan Size: up to NPR 1 million
- Interest Subsidy: 5% interest subsidy
- Priority Areas: Not specified
- Special Considerations: Migrant workers who have returned to the country within the past three years after staying abroad for at least six months can apply for the loan based on certification of their skills so that they can start a relevant business. For this, a detailed business plan should be submitted that clearly mentions how the enterprise would operate, the number of people to be involved in the business, and how the business would utilize their own skills.
Commercial Agriculture and Livestock Loan
This scheme was introduced by the government to address the problem of rising unemployment and manpower exodus from the country by encouraging youths to take up farming, as well as make the country self-sufficient in food production.
This loan can be provided against collateral of the same land used for agro or livestock undertaking or crops. For credit up to NPR 1 million, loans can be issued based on group guarantee.
- Loan Size: up to NPR 70 million
- Interest Subsidy: 5% interest subsidy
- Priority Areas: The scheme applies to loans used to produce, process, store and distribute vegetables, fruits, seeds, fish, herbs, mushrooms, dairy items, ostriches, turkeys, ducks, sugarcane, coffee, tea, cardamom, ginger, turmeric, jaitun, sunflower, allo, lokta, barley, buckwheat, and silam seeds. Interest subsidy will also cover loans extended to floriculture and beekeeping businesses, livestock and poultry, slaughterhouses as well as businesses related to storage, processing and distribution of meat items.
- Special Considerations: Individuals seeking commercial agriculture and livestock loan should submit a brief proposal of enterprise operation and utilisation of the loan facility. If the project is above NPR 1 million a Detailed Project Report (DPR) of the enterprise should be submitted to the bank.
Note:
BFIs are not allowed to add more than 5% interest on top of the interest subsidy while fixing the interest rate i.e. maximum 10% total interest rate. Loans exceeding NPR 50 million should be approved by a seven-member Central Coordination and Monitoring Committee formed under Nepal Rastra Bank’s (NRB’s) deputy governor who overlooks the banking sector.
Dalit Community Enterprise Development Loan
This loan scheme was initiated to meet the financial requirements of the youth under Dalit Community to start business for modernizing and promoting the traditional skill and occupation of the Dalit Community. The loan can be obtained under collective guarantee.
- Loan Size: up to NPR 1 million
- Interest Subsidy: 5% interest subsidy
- Priority Areas: Not specified
- Special Considerations: The recipient of the loan should belong to the Dalit Community and provide a recommendation from Rural Municipality (Gaunpalika) or Municipality (Nagarpalika) regarding their proof of belonging to the Dalit Caste. Additionally, a brief proposal for enterprise operation should also be submitted to the BFI. In case, where loan is secured to a group, the group should have a minimum of 5 members, each belonging to a Dalit Caste from different Dalit families.
The information in this blog is obtained from various sources including government budget speech (FY 2075/76) and newspaper articles by the author. The loan procedure may vary according to each bank. Respective bank liaison officer should be consulted for more details.
PAN Registration in Nepal for Individuals
A quick and easy guide for PAN registration in Nepal.
According to the new rule of the Government of Nepal, beginning from fiscal 2019-20, all salaried workers, including both government and private firms have to compulsorily obtain Permanent Account Number (PAN).
The reason for implementing this rule is to track revenue leakages. By making PAN mandatory, the government will be able to track the actual amount of tax that an individual has been paying out of his or her earnings and whether salary expenses as recorded in the accounting system of the employer are correct or not. All employers have to record Tax Deducted at Source (TDS) in the respective accounts of their employees and in case they do not own a PAN, then the government does not validate the employer’s payment of salaries to its employees.
With this new rule in place, people are hurrying to get their PAN registered. However, many are unaware of the process entailing the PAN registration and some even don’t know how and where it can be done. To get this problem sorted, we have actually tried and tested the easiest and fastest method for PAN registration and obtaining your PAN.
Follow these simple steps for your PAN registration in no time:
- Go to the website of Inland Revenue Department: www.ird.gov.np
- Scroll down and click on the “Tax-Payer Portal” link.
- On the left-hand side click on Registration (PAN, VAT, EXCISE)
- Click on the “+” sign to expand the vertical menu.
- Now, click on Application for Registration
- Fill out all the details and choose the IRD office located in your area in the Verifying Offices section.
- Press the OK button and you will be given the Submission Number. (Note submission number for future references)
- Press on “Continue” button.
- Now, fill out all your personal details.
- At the end, click on the “Save” button.
- Click on the “Print” button to get a copy of the submitted application form.
- Take the printed copy to the IRD office located in your area.
- The IRD office will then verify your details and provide you a PAN card which is generally expected to take around one day.
Important considerations
- The PAN Card is free of cost.
- You need to fill out the form in Nepali language. You can use Google Unicode for better assistance.
- You may send any authorized person to submit the application form and to fetch the PAN Card on your behalf. However, an authorization letter is required for the process.
Making Private Sector Engagement Effective in Nepal
In recent years, both the government and the development partners in Nepal have realized the importance of private sector partners in attaining development targets stated in Sustainable Development Goals (SDGs). Major development agencies like USAID and DFID have implemented multi-year, multi-million-dollar projects to support the growth of the private sector in the country. Various interactions and programs have been conducted to encourage better engagement from the private sector in development initiatives.
However, the question still remains about whether such programs have been truly successful in aligning the goals of the private sector to those of the government or the development agencies and ultimately SDGs. As Biruwa Advisors has served as a technical partner and consulting agency in several of the programs for Private Sector Development, it sees the need for more effective engagements and precise interventions to truly make such programs work in Nepal.
USAID recently came out with its Private Sector Engagement Policy, where it states that “private-sector engagement is fundamental to our goal to end the need for foreign assistance.” While this is a goal worth striving for, the way such engagement-oriented projects are carried out has often resulted in the outputs not matching its original objectives.
Through our work, Biruwa Advisors has outlined the following simple steps to overcome some of the challenges that we see in the private sector engagement projects in Nepal:
Engage and Align Goals: Governments and development agencies need to interact with potential private sector partners to understand their needs and motivations while attempting to identify shared goals where meaningful partnerships can thrive. Before any project is designed, necessary stakeholder interactions need to take place not just in boardrooms in Kathmandu, but also with potential program partners and beneficiaries in rural areas, for whom the programs are designed.
Create Necessary Enabling Environment: Private sector-oriented interventions require the necessary enabling environment like adequate government policies, access to finance and technical assistance for the projects to achieve its objectives. Due to the agendas that development organizations are guided by, the comprehensiveness of business facets is often not addressed. With organizations targeting only certain business support requirement, they are not being able to address business and management issues holistically. The failure to address holistic support for businesses mean unsatisfactory development results at the end.
Evaluate Program Beneficiaries and Tailor Interventions: Development programs often have the tendency to assume that all program beneficiaries are in the same stage of business growth and tend to provide interventions without taking time to understand individual project beneficiaries. This can sometimes lead to program beneficiaries not getting the support that they truly require. Thus, development projects should take the time to study each individual beneficiary and attempt to tailor assistance based on their needs.
Pilot Programs at a Smaller Scale before Full-Scale Implementation: Too often development programs have lofty goals and program interventions are designed to maximize impact. However, as with any program design, many assumptions are made regarding how the stakeholders or beneficiaries will react to the interventions. In several cases, development projects do not bring about desired results and yet fail to adapt to market realities. This is also escalated by the changing market needs and demands as most of the projects are multi-year. Thus, piloting the interventions at a smaller scale would test theories and allow for the implementing agencies to make necessary programmatic changes where necessary before intervening at a full-scale.
Need to Mobilize and Support Local Government Bodies: With the outset of federalism in the country, the local government has been delegated with more power and authority. They play a prominent role in developing policies and making decisions at the local level. Any program that is directed towards local development requires acceptance and support from the local body. Therefore, if development programs could be designed in a way that mobilizes and supports local government bodies then program implementation could be carried out more efficiently and effectively. As Biruwa has witnessed that the majority of the local bodies want to attract private companies and want to benefit their communities, they are clueless about planning and execution of such activities. If development organizations can support such local bodies, it will create a lasting impact in private sector development at the local level setting them as a role model for others to follow.
Use of Team Members and Project Partners who have Understanding of the Private Sector:
It is not uncommon that development programs are filled with development professionals with little exposure to the private sector. As a result, many programs are designed without truly understanding the needs and motivations of the private sector which leads to implementation becoming problematic. Thus, adequate resources in the team who have an understanding of such programs can improve program results.
Nepal’s economy is fledgling and recent federalization of government bodies has meant that there are many changes in how the economy functions. To build a thriving private sector that can help achieve targeted development goals, the government and development partners have to effectively design programs and ensure that implementation of the programs addresses the needs and motivations of the private sector.