Kathmandu, November 9

The National Micro Entrepreneurs Federation Nepal (NMEFN) and Deprosc Laghubitta Bikas Bank Ltd (DLB Bank) signed a memorandum of understanding (MoU) today, to promote micro entrepreneurship at the local level across the country.

The MoU was signed by NMEFN President Lakpa Lama and CEO of DLB Bank Sharada Prasad Kattel.

Speaking at the MoU signing ceremony, NMEFN President Lama said that entrepreneurs of small and cottage industries across the country have been deprived of micro finance facilities provided by different financial institutions. “Such small entrepreneurs don’t have access to bank loans and banks and financial institutions (BFIs), too, are reluctant to issue loans to small entrepreneurs,” Lama said, adding that the tie-up with DLB Bank would pave ways for new opportunities for entrepreneurs doing business in comparatively small scale.

Lama also said that loan facilities of BFIs and different subsidies of the government should reach small and cottage industries and entrepreneurs as micro enterprises are vital to alleviate poverty.

“Effective implementation of the agreement will benefit a large number of micro entrepreneurs,” he added.

The MoU has highlighted providing easy loan to micro entrepreneurs, holding skills and capacity development training among them and promoting micro entrepreneurship in the country.

Addressing the ceremony, DLB Bank CEO Kattel said that the bank is working closely with government’s Micro-Enterprise Development Programme (MEDP) to promote micro entrepreneurship in the country and increase access of micro entrepreneurs to bank loans. “Today’s pact with NMEFN is just a continuity of what MEDP and our bank had been doing previously,” Kattel said, adding that the bank will not hesitate to offer loans up to Rs 400,000 to any micro entrepreneur who has been trained by MEDP.

Acknowledging that interest rates on loans in the microfinance sector is higher, Kattel said that attempts would be made to reduce interest rates to facilitate micro enterprises. Meanwhile, Kattel also emphasised on effective execution of the agreement.

Meanwhile, Raveen Kumar Jha, executive director of the Cottage and Small Industry Development Committee, said that banks and other financial institutions should introduce programmes targeting small entrepreneurs at the local level as such micro entrepreneurs don’t even know about loan facilities provided by banks.

Laxman Pun, adviser at MEDP, said that micro entrepreneurs and financial institutions should develop a good relationship of trust to promote micro entrepreneurship. “Local economic development reduces poverty and also substitutes imports,” Pun added.