The state of women's entrepreneurship in Nepal is both tentatively hopeful and apprehensive. About 17 per cent of businesses in the country are women owned, in contrast to 30 per cent in Sri Lanka and Bangladesh
For nations to develop and prosper, the role of women in enhancing the economy is often acknowledged as crucial. Women in Nepal are entering the labour market and helping to boost national economic growth, but they face many obstacles. Indeed, the nation has taken positive steps towards promoting female empowerment, but there is still a long way to go, especially when compared to other South Asian countries.
According to the World Bank's Gender Data portal, the female labour force participation rate in Nepal increased from 23.6 per cent in 2010 to 28.7 per cent in 2023. Although this improvement is heartening, it remains far below the global average of 47 per cent as of 2023. About 90 per cent of women in Nepal are employed in sectors covering agriculture, domestic work and street vending, the World Bank Gender Equality in Nepal report 2020 found. These jobs tend to be low-paid, insecure and lack benefits or legal protection. In addition, women engage in unpaid family labour, which is not represented in the regular economy.
A number of laws and policies have been introduced to promote gender equality and economic empowerment of women. The Labour Act of 2017 provides for equal pay for equal work, while the National Civil Code of 2017 established equal inheritance rights for men and women, underscoring economic parity. Women entrepreneurship and skill development programmes initiated by both the government and private sector have facilitated women through finance, training and important aides that can help them in starting and managing their businesses. Initiatives such as the creation of gender-neutral loan criteria, a refusal to differentiate between loans issued to men or women, and limiting the amount of capital loaned have lessened such barriers.
However, challenges persist, the most prominent being the unequal division of household tasks. According to the Nepal Labour Force Survey (2018), females spend an average of 5.3 hours per day on unpaid domestic work, whereas males spend only 1.1 hours on average. This burden limits women's participation in activities that generate income, thus constraining their economic potential.
South Asia's female labour force participation rate has been historically low. In 2023, it was 37 per cent in Bangladesh, 33 per cent in India and 25 per cent in Pakistan. Nepal's 29 per cent ranks it in the middle. Bangladesh's relatively high participation rate is due in part to its focus on women's education and empowerment, especially in the garment sector, which comprises 80 per cent women workers.
Nepal has a huge gender pay gap, with women paid 28 per cent less than men for equal work (World Economic Forum's Global Gender Gap Report 2023), which is in line with the trend in neighbouring countries. But Nepal has done better than India, where the difference stands at 34 per cent.
The state of women's entrepreneurship in Nepal is both tentatively hopeful and apprehensive. About 17 per cent of businesses in the country are women owned, according to the Asian Development Bank. This is meager in contrast to Sri Lanka and Bangladesh, where the management and ownership of 30 per cent of tiny and medium enterprises are in female hands.
Women entrepreneurs in Nepal face challenges in accessing loans or financial assistance. According to Nepal Rastra Bank's Financial Access Report (2021), there are two male bank account holders for every female one.
Education is a key determinant of women's economic participation. Nepal has made considerable progress in education for girls achieving a gender parity index (GPI) of 1.0 for primary education in 2020. But the country lags behind Sri Lanka and the Maldives with higher rates of female literacy and access to higher education.
Bangladesh also invests in female education, which has resulted in higher literacy rate among women – 63 per cent verses 57 per cent in Nepal. This has opened up more formal sector opportunities, such as in the garment industry.
Nepalese women are still dominantly prevalent in the informal economy, even with the growing number of formal sector jobs in the labour market. A similar trend is evident across South Asia. While in Pakistan,75 per cent of working women are employed in informal jobs, India is not far behind. Bhutan is only marginally better. Informal jobs subject women to exploitation and economic uncertainty in the absence of formal contracts, paid leave or social protections.
Nepal can adopt the following measures to empower women for complete economic development:
Access to finance: Providing women entrepreneurs with access to financial services is critical. The success of microcredit programmes in Bangladesh, such as the Grameen Bank, serves as a case study for the empowerment of women through access to credit, especially in rural economies.
Encouraging formal sector employment: Nepal should focus on policies that address workplace discrimination, improving access to vocational training and eliminating the gender pay gap.
Participating in agricultural development: Ensuring that women are involved in agricultural development initiatives can lead to greater returns for both the individuals and the economy.
Escalating social protection: Key economic support measures for women include social safety nets, like health insurance, paid leave and retirement benefits, which are essential for women's economic security, especially for those working in the informal sector.
Programmatic interventions: Evidence suggests that investment in female education and on-the-job training will help women access better-paying formal employment, thus increasing economic independence.
Adhikari is Economic Development Officer at Dhankuta Municipality