How are Businesses Responding And Adapting?
A prolonged crisis, such as that facing Nepal, requires a strategic change in leadership vision and action. From the earthquake to the embargo and then the Covid 19 pandemic to the Russia-Ukraine war and the ensuing instabilities, Nepal has seen it all. And all this in the wake of a people’s war that crossed a decade. Today many economies around the world are challenged by surging inflation, debt tightening, climate emergency, human migration, changing geopolitics, and decelerating growth rates.
Crisis situation demands crisis response but what does prolonged crisis demand such that the country is undergoing and which has seen thousands of young people leave Nepal in search of livelihoods? Add to this, an unstable government, corruption of huge scales in governance, in law, and in business.
The world output growth is projected to decelerate from an estimated 3% in 2023, marking one of the lowest growth rates in recent decades, according to the United Nations World Economic Situation and Prospects (WESP) 2023.
Future recession and uncertain economic conditions are guaranteed. While global growth is forecast to moderately pick up to 2.7% in 2024, can smaller economies sustain the heat of tightening global financial conditions and debt vulnerabilities? Over 85% of central banks worldwide have tightened monetary policy and raised interest rates in quick succession since late 2021 to tame inflationary pressures and avoid a recession. But global inflation reached a multi-decade high of about 9% in 2022 and is projected to ease but remain elevated at 6.5% in 2023.
In Nepal, growth rate is in the red. Mining, quarrying and construction industries are struggling. The economy has been shaken by the real estate and stock market crash and credit crunch. Sales have slowed down and business, in general, is down by 10% to 60% based on the nature of business. Industrial production has reduced to 30%. The private sector, which contributes 81% of the GDP and accounts for 85% of the jobs, is struggling to stay open and pay salaries. The situation is so precarious that even teachers' and government employees’ pension payments have been put on hold. Both the social security benefit payment and debt servicing are behind schedule. The federal government reduced the equalisation subsidies to the provincial and local governments by 50% as a result of this situation. And things could be grimmer unless the monitoring authorities think fast and well while executing policies and reforms.
In this edition of Business 360, we spoke to different sector experts on how they comprehend the situation, the impact on their business and industry and what are they doing to ease the challenges. Answers have been mildly edited for clarity.
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Sahil Shrestha
CEO, Cimex Inc
How has the sustained economic crisis affected your industry?
It’s a big crisis that automobiles are facing at the moment. If we look at the statistics, yearly average four-wheeler sales were around 15,000 with a fluctuation of 2,000 up or down. Last fiscal year 2079-80, total sales were only around 9,000. The crisis that is seen in the market has hit every sector severely. Ranging from the liquidity crisis to economic slowdown or downturn, automobiles have gone through a severe crunch.
Economic parameters were not that great overall but if we compare it with the database from the last 4-5 years in the automobile sector, we have seen a massive decline in sales. Only 60% of the market was in function, the people in this industry call the year 79-80, one of the worst years where they faced recession massively in the industry.
If we have to compare, this year has relatively been a better year for the industry to catch pace. We have realised that there has been a rise in inquiry about automobiles in the recent term and banks have also granted the first phase of loanable funds. Even if these are minimalistic changes it has given some hope to the industry.
On the contrary, we also have to look at the current economic situation of our country and globally as well. The pandemic and war have been a prime cause of global economic imbalance and its ripple effect can be seen today and in the upcoming days as well. Hence, the situation might not be better in an instant but will take some years to get back to the state we were in previously.
What are some of the things you have done to address the ensuing challenges in your business?
When we talk about challenges, automobiles have faced a lot of problems. There had been a luxury goods ban from our government and from that point onwards, it has gone downhill.
Similarly, from an EV perspective, sales boomed as people were aware that the price of petroleum products will be increasing and owning an EV will be far more beneficial. The fiscal year 2079-80, was the highest selling year for EVs and there are many reasons behind it. One is the awareness; consumers are aware about the opex expenditure saving meaning they don’t have to spend on the maintenance and fuels. Second is probably the consumption of domestic energy, the electricity we use is hydroelectricity which is green energy. Third, is technology. We as humans are always looking forward to learning more about the technology and EV models are providing exactly that.
EV is a new and revolutionary movement in history. As it actually boomed in the last year, we didn’t have to resort to any harsh measures. But as a stakeholder in the business, we should be prepared for any scenario in the coming days. Database and its analysis are the most crucial when it comes to being prepared for the future. So, we should always be ready to tackle the obstacles that come our way. Hence, we have to be in touch with other stakeholders to monitor the situation and create a space where we should be prepared for the unknown.
Could the government have better handled the economic vulnerabilities and in what ways?
In business, there are core things that the government needs to address in a basic rudimentary manner. Our economy is 37–40-billion-dollar GDP and it is not moving, growing and expanding according to the pace of our GDP. In Nepal, most of the economic activities have little value addition. Such as manufacturing service should be given priority as they can have the potential to export the products.
If your finances are proper, other things can be streamlined. In the case of our country, there is under-utilisation of budget and the uncertainty of the source. They prepare populist, one sided favourable budgets which are somewhat very dreamy and not reachable. They keep contingency in the sources and are never sure of what and how to proceed.
Despite thousands of hits and trials, the government tends to overestimate their revenue collection and as a ripple effect they start taking money from the citizens of Nepal.
Personally for me, running an organisation is about effective synergy, synchronisation, cohesion between different units because if we can achieve productivity in a cross-functional team, then only an organisation or any entity can walk in the path of success. But we can see a severe lack at every government level.
What are some policy reforms or initiatives that could help the industry/sector you are operating in do better?
As a company, we always prepare for both good and bad times. One thing that we are always concerned about is the policy department. In the last 3-4 fiscal policies, the EV taxation policy was changed around 5-6 times. As any business, we plan for a year or even more because businesses are there to last for a longer period of time. It involves other players or stakeholders of the ecosystem. But Nepal has been changing policies in a drastic manner. They keep changing the tax rates frequently. The frequency of change is unpredictable and illogical.
The person in the relevant department should understand and have knowledge about it. And what are its benefits in 10-15 years? Our government is only focused on receiving taxes but not looking after what can be its effect for all. There should be a suitable environment for businesses to run. Now the question is: isn’t it fundamental for the government to cater to the people of the country rather than changing their policies every now and then to just gain extra benefit from people? They are only thinking for themselves and not being far sighted at all.
Sustainability is the key to any business. Hence, the government should stop thinking from the tax bracket point of view and think for the betterment of businesses which can help generate revenues and profits.
How do you view the immediate future for your sector/industry?
We are hopeful this year can be better than last year. There are definitely challenges, both internal and external but for the EV stream, people have become aware of its benefits, the economic gains, and charging network availability has been a plus point for the EV ecosystem.
On a positive note, there is an increase in charging stations. Nepal Electricity Authority (NEA) has installed 15 chargers and is adding 15 more. Other distributors in the industry have also installed their charging stations. We have 30+ charging points along highways that link major cities and we are planning to add 15 more. Overall, I feel EVs will slowly start taking the market as its sustainability factor will encourage people to opt for it.
But as an overall scenario of automobiles, it might take a longer time to catch the pace of the current market. Vigorous research and study are required to go forward in the current environment.
Your business mantra when addressing a crisis? What can we learn from you?
I think one has to be patient and vigilant. One has to look in all directions and have the knack of checking out all the relevant areas in the business. Knowledge and information are crucial in any business. But information might be true or not. We live in a bubble where we tend to accept things that fit our mindset without looking at the facts.
In any business, one has to look at all the fields that concern you and then only proceed to make decisions. This is something that I follow to be updated and be on my ‘A’ game.
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Bijay Rajbhandary
Chairman & Managing Director, CE Construction
How has the sustained economic crisis affected the industry you operate in?
It has been affected severely. Basically, we are into three sectors, general contracting, real estate and hydropower. As far as general contracting is concerned, there are three stages in it; completed project, ongoing project and future project. Due to the economic downturn, our clients are not able to pay for the completed projects and for ongoing projects, there is lack of cash flow hitting our turnover directly. In earlier days, we used to enjoy credit facility from our vendors but currently, we have a limited facility due to the NRB directives’ working capital capping. The upcoming projects are on hold due to lack of trust in the economic situation of the country and globally as well.
Real estate is the most impacted during this economic downturn. Real estate is categorised in two parts - investor and end user. Previously, there were 80% investors and 20% end users, but in the current market that 80% has dropped down to 20%. People are not confident in taking the leap because of market volatility. End users might be wanting to upgrade their property or could be first time buyers but their decisions are on hold. End users have declined by 50%. Bank facilities are limited in addition to high interest rates and lack of loan investment and project financing. NRB directives are very stringent in terms of loan percentage and debt equity ratio.
The regulatory authorities have a huge role to play. They impromptu exercise ‘hathbandi’, ‘kittakath’, land classification, halsavik and others. These sudden rules and regulations have caused projects to go on hold and this ultimately hits revenue.
In the hydropower sector, we are not getting disbursement from banks. Previously it used to be a lot easier for development work. But now banks are not willing to issue the guarantee; in hydropower there is performance guarantee and advance payments system. Banks are finding it difficult to fund projects due to LC limitations. We also have severe problems with insurance and its policies making it all the more difficult to work in this sector.
What are some of the things you have done to address the ensuing challenges in your business?
I am practicing focus management. And within it what we call micro management or process mapping. Every process now needs to be more efficient than before. There is a terminology called lean technology and value engineering. We are putting everything we have learned previously in practice during the time of crisis. We have come up with out-of-the-box strategies to pull customers. Mission invented diversion is a model that we are actively using. Despite all the difficulties, we sold around 89 units in the last year.
The major challenge that we are facing is cash flow. Cash flow management is definitely a need but it is an art as well. The objective is to not give up despite the difficulties and to keep climbing the ladder even if it means that we take one small step at a time. These challenges have made us realise that if we keep on moving now, in the coming future, we will have no competitors.
Also, when it comes to layoffs and cost cutting or not being able to pay salaries on time, my question is who has provided salary right on time in this period? I am confident that most businesses are struggling to meet and accumulate revenues and pay their staff. But I believe that with right management we will overcome this obstacle as well.
Could the government have better handled the economic vulnerabilities and in what ways?
The government can handle things so much better. We do have good, intellectual people in there but who is our government? For example, one minister is allocated for education but tomorrow the same minister is placed in tourism. So, who is our government when they are changing so often? An expert and established person should be placed in a position where they have knowledge and ideas about the ministry.
Here in Nepal, I am always ready for the surprises that come unannounced and from nowhere. We have been in this business for the last three decades and every other day, there are new leaders, rules, policies and so much more. When there is a gap and uncertainty from the government, how can one depend on it?
The complexity of the system is something that we have become accustomed to. The uncertainty has trained us to have a far-sighted mindset where we are prepared for anything that is thrown our way. We just have to figure out the intensity of the change and right now, we are doing exactly that, understanding the risk and balancing the intensity of the presented situation.
What are some policy reforms or initiatives that could help the industry/sector you are operating in do better?
Rather than policies, it’s about the consistency. Nepal has been implementing policies with less research and dropping them after a while when they realise that it’s not working. Irrespective of who is in power, there should be national agendas that should have long-term goals.
For example, hydropower is one of the most sought-after sectors. If we have a concrete policy and management, then we will definitely be able to sell electricity to India and Bangladesh. This will help boost the economy and generate revenue. Additionally, it will have a socio-economic boost. The people where the construction is allocated will greatly benefit with 10% human resources being pulled from the area resulting in financial gains and quality life.
Therefore, consistency of policies is the need in every sector right now. The taxes we pay to the government should benefit us rather than the ones in power.
How do you view the immediate future for your sector/industry?
We don’t know what lies beyond the situation but I see opportunity in every problem. We, as a company, have started using strategies in real estate to help the sector enhance. We are launching 4-5 projects in the coming six months and working to make them possible.
The situation all over the country for construction looks like it will be worse in the coming six months. The government recently has mentioned that they will not be able to pay contractors, meaning that 80% of the flow is not activated from the government. It ties the hands of the contractors as they have to invest in human resources and materials. It’s a chain effect. Until and unless the government tackles this issue in depth, we will continue to have problems.
Your business mantra when addressing a crisis? What can we learn from you?
We as humans have to accept that crises do come but every problem has a solution. First of all, one has to know what is the root cause of the problem and communicate about it. Anyone in business has to accept and understand that problems could be anywhere in the system. So, one needs to hear from both the bottom and top levels.
Understanding the workflow and not giving up is the key to running a business. Business ultimately needs exposure and leaders of the business should have good relations with other stakeholders. Networking helps us in identifying problems and working on them.
Strategic planning and brainstorming ideas is the key to tackling many problems.
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Rabi Singh
President, Federation of Contractors’ Associations of Nepal (FCAN)
How has the sustained economic crisis affected your industry?
When it comes to crisis, Covid comes to mind. It threatened industries like ours. Construction stopped for a long time. The consequences we had to bear and the overheads were huge. During those two years, the construction industry fell into debt of almost Rs 340 billion of which the interest came to around Rs 34 billion. Overheads reached Rs 100 billion as a cumulative increment. This has shattered the construction industry.
After Covid, the tariff on Chinese vessels took a hike. This increment in sea freight contributed to increasing costs.
Fuel supply and price volatility badly affected those industries who consumed large amounts of fuel or were in the business.
Meanwhile, the Russia-Ukraine war had its effect on the consumption sector i.e, the cost of food grains increased.
In face of all these difficulties, demand went down and there was no financial back up left. We became vulnerable to the extent that 20,000 people who were working with us had to leave their jobs.
In Baisakh 2076, the public procurement act had its sixth amendment that brought a new manual stating the deadlines of any construction work not to be extended longer than 50% of its actual time frame. This created hindrance for 2,772 ongoing construction works for 11 months. After 11 months, the government passed the ninth amendment and a new policy came extending the deadline till 60 days from the date of amendment. This created a chaotic situation.
The next thing is, 25% of the payment that comes to the industry goes back to the government in a month. If I have to talk about the scenario a year ago, more than 36% of the cash went back to the government.
Inflation has reduced demand. When there is no demand, the amount of production decreases. When the amount of the production decreases, the cost of production increases. This affects private investments. When there are no private investments, construction decreases.
Previously, when the government could not generate revenue, it tried to stabilise the economy by taking loans at the end of the fiscal year. Basically, the government is obliged to make payments of the previous month but this time the payment due was not of only one month; the payment of 11 months was pending. This affected 200 billion in capital assets. When a company gets its payment only after 11 months of working, imagine how difficult it becomes to survive.
What are some of the things you have done to address the challenges in your business?
To address the challenges, we have done advocacy and brought some changes. After Covid, Federation of Contractors’ Associations of Nepal sat for a meeting with the government and we were able to extend the deadline of all the construction works that could not function due to the crisis. Among 2,700 pending works, 1,600 were successfully completed.
We also suggested the government to not allot more than five construction projects at a time to any one construction company. This ensures timelines and quality of work while also helping generate more jobs.
Both the government and Nepal Rastra Bank could have done something to help our sector revive. They could have categorised the construction industry as the most affected but they didn’t. We even sent a request letter but received no response. At this time, we are in negative growth rate.
We have forwarded our demand to the government to release all the pending payments so that we can continue the work. Until the government acts professionally, we cannot act professionally.
Could the government have better handled the economic vulnerabilities and in what ways?
Federalism was not a good choice for Nepal. When the country went into federalism, all the plans and policies formulated by the national government applied to both the provincial and the local governments. With little to no experience, both governments could not perform well. They didn’t have the potential either. They use their budget in formulating and executing new plans and policies rather than continuing the existing ones. Therefore, since 2075, we are in a very problematic situation.
Nepal Rastra Bank has corrected its course and made our categorisation as the most affected industry. But then we are suffering from the effect of three consecutive years. If NRB had done this earlier, we need not have had to bear this extent of loss. Ultimately, the overall economy of the government would also have shown some improvement.
There are various problems at the local level. The most frequent problem is land. Cases of fraud have been found. In many places, there is a problem of right to way. Construction of local hospitals is also pending. We go through a crisis every year. The most frequent crisis that we go through is the escalation in prices. Right now, the cost of construction equipment has decreased by 25% but the price increases very rapidly when there is a lot of work. Pre-planning and preparedness could help tackle the consequences that can occur due to any crisis.
What are some policy reforms or initiatives that could help the industry/sector you are operating in do better?
The government is now planning to extend the deadline for construction works for almost 2,700 projects. But deadline extension cannot be the solution all the time. Along with the deadline extension, the government must improve the payment system. Government must prioritise work. Government should focus on initiatives that can give immediate results within the budget.
Initiatives like training for construction workers is also necessary. A technology friendly environment should also be encouraged.
Several construction companies have purchased construction materials on credit but we are unable to pay for it on time and are forced to take loans. There is a rule that if the deadline of loan exceeds 90 days, banks have to provision 100% to cover the credit. Because of this, banks are also in trouble. If Nepal Rastra Bank actually wants to revive the construction industry, they must consider refinancing on better terms with single digit interest rate. If banks have a mandate to invest 15% of their capital in providing construction related loans, it could help us immensely. Right now, we are working to ask NRB to extend the time frame for loan settlement. Genuine parties must be facilitated and those who have misused loans or are not working on schedule should be terminated and blacklisted.
We have been able to amend the Procurement Rule. Now, it is time to implement it. Unless we implement these policies properly, there is no point in drafting it.
We have been unable to utilise the money that we receive in our national coffers from remittance properly. Recently, a new policy has been formulated which asks to increase 1% interest rate for foreign based Nepali workers which I find very interesting. Along with that, if we could also provide them with information on possible areas of investment, it could add more value to the country’s overall income. We should use remittance in productive sectors rather than just on consumption.
We should be glad that Nepali people are so hardworking and ready to work in such risky jobs. Now, it is our duty to capacitate them with skills and knowledge so that they can work more smartly and help the country grow. There must be a respectful environment for migrant workers.
How do you view the immediate future for your sector/industry?
I joined FCAN in 2057 BS. Since then, I am fully committed to making a professional working environment here. I motivate all the staff members to be responsible and at the same time, fight for their rights and ask them to perform their duties properly too.
There are instances when many construction companies have used the payment received from the government elsewhere. Construction of roads and bridges were put on hold for a long duration of time. We didn’t investigate those matters before but now we are making all possible attempts to ensure this is not repeated.
I see the future of the construction industry to be bright. Funds are a problem now but it can be managed with the right mindset of all stakeholders.
Your business mantra when addressing a crisis? What can we learn from you?
Reducing expenses and prioritising deadlines are important at this time.
Inflation is on the rise and we are in talks with the central bank to help us mitigate the challenges of rising prices. People’s interests should be a priority for the government and staying focused and positive is important for every entrepreneur.
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Janardan Baral
President, Society of Economic Journalists - Nepal (SEJON)
How has the sustained economic crisis affected your industry?
Though every other industry is affected due to the declining economy, the most affected is the media. Media makes its revenue from the advertisement of construction and automobile companies. But they themselves are under pressure and in a problematic situation. Due to this, they try to reduce their expenses and in doing so they end up reducing their expenses on advertisements as it is most convenient for them. This directly affects media.
Many other industries have been affected by the current state of the economy but the most vulnerable is the media. I will share one case which will make it clearer about the effects of the declining economy in the media. Back in 2021, when I joined Society of Economic Journalists - Nepal (SEJON) as President, I could see a kind of zeal and enthusiasm in the media industry. Media investors used to be in a crisis of technically skilled manpower. Reporters who could give news on the economy used to be very few. But nowadays, we can see that the media industry is growing. They are somehow able to manage in this regard.
At this time, it is likely that small media might go for shutdowns as this economic challenge is quite huge for them. However, we can be positive with regards to well-established media houses. I would like to add that this is not an economic crisis. This is an economic downturn. This downturn has affected the media sector very badly.
What are some of the things you have done to address the ensuing challenges in your sector?
What I want to suggest to the media sector is that there is a crisis and this will not last long. Economic indicators are slowly showing positive results. We need the media in order to boost good governance and transparency. Media is one of the biggest stakeholders which has manpower as its asset. Media is a knowledge industry. It is needless to be aggressive and lay off manpower at this time. Rather, the media industry must retain the skilled manpower. If we lay off manpower at times like these then we will face scarcity of skilled manpower in the days to come. Media industry has not been able to function well these days. Well trained workers are leaving the media, they are either in corporate sectors or are out of the country. Media has been unable to retain good brains for a long time. Media industry must realise that the stronger brains it has, the more credible it becomes.
Could the government have better handled the economic vulnerabilities and in what ways?
Poor national policy in Nepal and some disturbing situations in other countries are contributing to a deteriorated economy. The central bank became more protective and supplied almost Rs 300 billion in the market in order to help the economy during the Covid. Banks released funds through various means that reduced the interest rate and increased liquidity. The fund got invested in three sectors which were import finance, stock market and real estate. The interest rate on loans had also been reduced to 6% and banks were literally reaching out to the public to avail loans. But resultantly, imports increased and the nation’s foreign currency reserves decreased so quickly that reserves capable of handling import of 16 months were reduced to six months only. Due to this situation, the government and central bank introduced a new policy restricting imports and reducing demand.
The first policy they formulated was to ban the import of certain luxury goods. The second was to increase cash margins on imported goods. When the government used the instrument to decrease demand by increasing the interest rate - all at the same time, the CD ratio of 80% turned to a CD ratio of 90%. From that very day, banks suffered and could not provide any money in the market. The government tried to protect the external sector of the economy but in turn affected the internal sector with revenue of the government getting affected badly. The government could have increased its own expenses and given a lift to economic activities but it is doing just the opposite. Reducing unnecessary expenses is good but if the government is reducing its overall cost, then that’s foolishness.
Now, the central bank has introduced a new policy and is assuring credit growth of 12%.
To have this situation under control, the government must think about its sources of income. Whether it is to take international loans or use different instruments such as green finance, green bond chain, blended finance, Industrial Development Corporation Fund, etc. Doing this would decrease expenses and increase demand stabilising the situation.
What are some policy reforms or initiatives that could help the industry/sector you are operating in do better?
The media industry has been facing shocks one after another. During the economic downturn, the high court banned the advertisement of liquor. Liquor advertisement was one of the biggest revenue sources. The government’s decision is not wrong but the government should bring some policy incentives that could help the media sector as well.
In the last fiscal year, the government had segregated some portion of the budget for the media but this year, they have not allocated anything. In the entire world, the government is the media’s major source of advertisement and the same applies to Nepal as well. The main problem is that there are irregularities in government allocation for the media. Only 20% of the budget set aside for government advertisements is received by media. The rest 80% is distributed along the way even before it reaches the media.
The discounts made to the advertisers are for the sake of sustaining operations at the moment. Ironically, the discount taken by government agencies is nothing but an act of corruption.
If corruption is stopped, there could be a plethora of changes in the industry.
How do you view the immediate future for your sector/industry?
The current scenario indicates that in the next six months, the media sector will still be in crisis as the media industry benefits only when the country’s economy is in a better space. The economy has started to get better but other industries too have to be stable to provide advertisements and that itself might take another year. This is all again reliant on policy reform and implementation to secure the economy.
Overall, our indicators do show that we are on the correct path. Our foreign exchange reserves indicate that there is enough money to sustain our imports for the next 10-11 months. Our balance of payments is at Rs 229 billion plus and while comparing to the previous year’s sheet, it is only at Rs 69 billion negative whereas previously, it was at Rs 592 billion negative.
According to the economic growth projection, there is a possibility of 4-5% growth and as Nepal records the highest remittance inflow, this indicates that the economic situation is gradually getting better and will help all industries rebound. My prediction is that it might take a year for the industry to gain stable ground.
Your business mantra when addressing a crisis? What can we learn from you?
As I have been working in the media field for a long time and as a person who is in a leadership position, my strategy is focusing on team management. Media is an industry in which working alone will not get any kind of result. It is an industry where collective effort is mandatory to get results. Proper team play is essential.
My three mantras are focusing on media content, networking and keeping a positive attitude.
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Darshana Shrestha
Second Vice President, Federation of Woman Entrepreneurs’ Associations of Nepal (FWEAN) CEO/Founder of Nature Nepal
How has the sustained economic crisis affected your industry?
Economic crises, whether global recessions, local financial downturns or other economic issues, have broad consequences in all sectors and specially affects women-owned businesses. My business is no exception.
Due to recession, the number of orders for my products has decreased indicating that consumers are buying less. They may have prioritised essentials over luxury or non-essential goods. At the same time the prices of raw materials have hiked and availability is also not as per my need. This has impacted manufacturing capacity. In the given circumstances, I struggle between keeping the same price without profit on my goods and raising the price. Another and the most challenging part is following up on payments. My supply chain is completely disrupted.
To manage expenses, I had to lay off workers, limit the number of employees, and relocate my workshop. At the same time, my market share shrank, and there was competition in terms of products and prices resulting in lower profits.
What are some of the things you have done to address the ensuing challenges in your business?
I had more than 20 product lines of soaps, massage oils, body balms and so on which I have now reduced to a handful, focusing only on those that sell well in the market. I only make the others when I receive orders.
I reviewed my financial situation and put cost-cutting strategies in place and managed supplies and inventories.
With a smaller workforce and reduced working space, I focused on my core business operations.
I have attempted to create an online presence and promote myself through digital channels.
Could the government have better handled the economic vulnerabilities and in what ways?
Yes, the government could have managed the economic shocks more effectively. Few things, in my opinion, the government could have done are: Through grants, low-interest loans and subsidies, provide access to finance to vulnerable enterprises, particularly women-led enterprises. These kinds of initiatives should target the right audience. The sad part is that the government has terminated the Women Entrepreneurship Development Fund (WEDF) and has temporarily halted subsidised loans to women entrepreneurs. These loans must be continued. The government could collaborate with organisations like FWEAN to reach out to the right women entrepreneurs who are mostly severely affected by economic shocks.
The government should update regulatory measures such as tax deadlines, refinancing, loan repayment and other compliances to help keep enterprises running in difficult times instead of burdening them further. The government’s policies and programmes should not be applied in a blanket approach. The government should devise specific approaches for different challenges. The government should also develop economic recovery strategies, initiatives and policies to address relief measures for economic growth and resilience.
It is also critical to improve skills in digitising the businesses of women and vulnerable groups and to give internet access to all areas of Nepal.
Also, the government should encourage entrepreneurs to localise their enterprises and provide incentives to those who use local resources and create jobs.
The government should assist in identifying overlooked natural resources having significant economic potential.
What are some policy reforms or initiatives that could help the industry/sector you are operating in do better?
I am into the herbal industry that manufactures natural aromatic skincare products. In my view the herbal industry in Nepal could benefit from several policy reforms and initiatives to foster growth, sustainability and innovation. Let me share a few points:
The government should establish research and development funds to support research and innovation in herbal products, herbs cultivation and processing techniques.
The government should focus on standardisation and certification for herbal products which ensures consistency, safety and efficacy to gain consumer trust.
It is equally important to have proper herbs processing and storage units to ensure quality.
Focus on technologies that support sustainable cultivation and harvest. Special subsidies and incentives should be provided to those who are adapting sustainable and eco-friendly cultivation, harvesting and processing and also to those who are practicing traditional and indigenous methods to produce herbal products.
Marketing is another challenge. The government can support businesses like mine to find a better global market. This can be done by helping us to participate in international trade fairs, exposure visits to promote Nepal-made herbal products. Develop strategic plans and programmes for promoting Nepali herbal products in international markets, focusing on product differentiation, branding, intellectual property and market research.
These policies and initiatives are very important to implement. If implemented, it can definitely contribute to the growth and sustainability of the herbal sector in Nepal, which will create economic opportunities to the wider population in the country and at the same time can preserve our rich natural resources and traditional knowledge.
How do you view the immediate future for your sector/industry?
Businesses that are adaptable, innovative and responsive to changing environment will sustain. I foresee some businesses doing well if supported by the government. There will be growth in health and wellness as more people are shifting their lifestyle and adopting natural products against synthetic and chemical laden products. In this case, there is hope that the demand for natural and herbal products will increase. This trend will support local businesses and sustainable practices in Nepal. There will be more prominent brands for herbal products in the country. There will be more marketing platforms, mostly digital platforms like e-commerce sites. More women will be able to sell their products online.
Your business mantra when addressing a crisis? What can we learn from you?
When addressing a crisis, we can employ some strategies that leverage our strength of doing business.
For me, learning an attitude for adaptability is the mantra to sustain my business. Additionally, digitise your business; explore your e-market. It is possible because everyone has a smartphone in their hands. You can reach the global market easily.
Prepare your business continuity plans for any circumstance. Prepare for change with better planning. Stay informed about market trends, customer demands. Look for opportunities, be ready to diversify your business, and embrace innovation. Build your consumer trust. Know your financial status and channels.
