Nepal | May 27, 2020

Lack of rural financial services affects micro entrepreneurship

Himalayan News Service
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Kathmandu, December 5

Stakeholders have said that lack of financial services from bank and financial institutions (BFIs) in rural areas is the major setback for development of micro enterprises in the country.

Speaking at a workshop titled ‘Job Creation Through Enterprise Development’ which was organised today by Ministry of Industry (MoI), Yam Kumari Khatiwada, joint secretary at Industrial Promotion Division of MoI, said that entrepreneurs in remote areas do not have access to services of financial institutions, which has resulted in poor development of micro enterprises in such areas.

Even if some financial institutions have expanded to country’s remote regions, micro enterprise sector is charged up to 22 per cent interest on loan, according to Khatiwada. “Lack of financial service providers in remote areas and high interest rate for deprived sector lending is impeding the growth of micro entrepreneurs in the country,” she said, adding that attractive financial services should be made easily accessible for micro entrepreneurs for the development of the sector.

Khatiwada stressed on the need to implement programmes like Micro Enterprise Development for Poverty Alleviation (MEDPA) in Micro Enterprise Development Model (MED-Model) to develop micro enterprises at the local level.

According to her, a strong coordination between government’s line ministries, development partners, financial institutions, private sector, technology providers and business development service providers is crucial to uplift micro enterprises of Nepal.

Amid similar event few weeks ago, Industry Minister Nabindra Raj Joshi had informed that the government is holding talks with Nepal Rastra Bank (NRB) to bring down high interest rates on loan provided to the microfinance sector.

Meanwhile, Narayan Prasad Bidari, director general of the Department of Cottage and Small Industry (DoCSI), informed that direct employment has been generated for more than 11,450 individuals in the ongoing fiscal year under the government’s programme — Employment Generation Through Promotion of SMEs.

Under this programme, the government aims to generate at least 50,000 direct jobs at local level through skill transfer and entrepreneurship promotion.

“We have been providing technical skill trainings to existing micro, cottage and small entrepreneurs along with awareness campaigns for self-employment and employment through entrepreneurship development,” said Bidari.

Also addressing the workshop, MoI Secretary Shankar Prasad Koirala said that MoI would launch new programmes soon to develop micro entrepreneurship in the country in partnership with development partners.

 


A version of this article appears in print on December 06, 2016 of The Himalayan Times.


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