23rd April 2018
Established in July 2003, Federation of Woman Entrepreneurs’ Associations of Nepal (FWEAN) is an apex body of Women Entrepreneurs’ Association of Nepal (WEAN). FWEAN is affiliated with 30 district chapters which represent over 3,000 women entrepreneurs, mostly in micro and small and medium-sized sectors. FWEAN addresses the key issues of women entrepreneurs through advocacy campaigns, capacity building programs, market development, and business skills trainings, among other initiatives.
We would like to inform you that with continuous advocacy by FWEAN and other likeminded organizations, the Entrepreneurship Development Fund (EDF) loan for women, which grants loans between 1-5 lakh in value, was passed and implemented in Nepal in the year 2014/2015 AD. We thank the Government of Nepal (GoN) for allocating a total budget of NPR 18 crore for women entrepreneurs’ to upscale their businesses. Unfortunately, an individual woman entrepreneur can get only NPR 1-5 lakh as a loan which is not enough for the growth of their businesses.
FWEAN will be continuing its policy advocacy initiative to ease access to finance for women entrepreneurs through affordable and secure options. At present, there is an urgent need to upscale the Entrepreneurship Development Fund (EDF) loan so that an individual women SME can receive NPR 10-25 lakh at 6% interest rate.
The major objective of this roundtable discussion is in regards to upscaling the Entrepreneurship Development Fund (EDF) loan to support the growth and sustainability of the women-owned enterprises, and to consequently generate employment opportunities, which is important for the economy of Nepal. Higher loan amounts will particularly help women entrepreneurs who are exporters and need to scale up their businesses.
Nowadays, the cost of doing business in Nepal has increased.
To startup, expand their businesses, and be successful, Nepalese women entrepreneurs’ need an average of NPR 5-25 lakh, due to the high cost of raw materials and the necessity for storage of raw materials during off-seasons; high labour costs; and expensive machineries. According to women entrepreneurs, the “average cost of doing business is NPR 10 lakh in Nepal”. According to the Department of Small and Cottage Industry (DCSI), to date, 765 enterprises were awarded loans from DCSI in 41 districts. In the year 2016/2017, from 12 districts including Kathmandu and Bhaktapur, out of 384 women entrepreneurs a total of 337 women entrepreneurs received an average loan between NRS 1- 2.5 lakh. Thus, there were only 47 women entrepreneurs who received loans above NRS 3 lakh.
The data has been extracted from DCSI that due to the lower loan amount, only 7 women entrepreneurs all over Nepal were able to get a loan of NPR 5 lakh each, which is not encouraging for boosting women-owned enterprises. According to Mr Satrugan Pudasainee, DCSI Director General, “the loan amount is small and the ceiling should be increased up to 25 Lakhs. This program should target those entrepreneurs who are export-oriented and willing to expand the business to a large scale.”
FWEAN has taken the initiative to advocate the increase of the EDF loan amounts to NPR 10-25 lakh and we need your support and cooperation in this matter.
Your guidance and help in advocating the policy will directly benefit women entrepreneurs all over Nepal.