Himalayan News Service

Kathmandu, March 26:

Entrepreneurs who are involved in micro and small enterprises (MSEs) have not been able to access credit easily. This has come out as one of the major hurdles in boosting such ventures.

This is according to a study carried out by the Agriculture Concern Society-Nepal (ACoS) with financial support from the Intermediate Technology Development Group (ITDG). The study was done to take stock of the industry policy environment in respect to large, medium, small and micro-scale entrepreneurs, with a special focus on agro-processing enterprises.

At the function held here today to present the findings of the study, expert Tek Bahadur Thapa, member of ACOS, said that MSEs are suffering from credit mismatch between demand and supply of raw materials in the absence of production planning and contractual production mechanisms. Thapa said that poor identification and promotion of traditional food items, weak infrastructural facilities, frequent changes in policies, poor communication and coordination between agencies and marketing services are some of the causes for the low productivity of MSEs in the agro-processing sector.

Nara Hari Dhakal, vice-president of ACOS, speaking at the seminar said that MSEs have not been able to contribute to the national economy as expected, while under-employment remains huge in the country.

He stressed on the need to develop MSEs through social mobilisation.

According to the findings, major problems faced by Nepali agro-based industries in general and MSEs in particular include seasonal and unreliable supply of raw materials, low level of education and training of entrepreneurs, use of traditional and often obsolete processing technology and weak R&D.

Poor performance of MSEs is also attributed to the lack of qualified agro-processing technologists, shortage of appropriate packaging materials, inadequate marketing facilities, poor quality of processed products and poor management skills, as per the new findings.

To reorient and rescue MSEs from this difficult environment, according to the study, experts have given various recommendations. They include identifying focal points for services to agro entrepreneurs, introducing a mechanism for production planning, strengthening public advisory service to address the needs of agro-based industries, local integration of raw material supply and agro industrial production in remote areas.

Experts have also asked for implementation of policies effectively, ensuring stability. It further suggests focusing on women entrepreneurs in agro-processing, amending the labour and food act and promoting good manufacturing practices.

According to available statistics, small, micro and cottage industries alone contribute 80 per cent of total exports from Nepal. These industries also employ 76 per cent of the workforce, which plays an important role in the national economy and poverty alleviation.