The Impact of SMEs Development on Youth Empowerment in Nepal

Group Members• Arogya Joshi• Erika Shakya• Ghanashyam Pokharel• Karna Bahadur Lama

Table of Contents1. SMEs Development in Nepal: A Contextual Exposition2. Funding Windows for SMEs3. Government Activities to SMEs Development & Youth

Empowerment 4. Impact of SMEs Development on Youth Empowerment5. SMEs Contribution to Economics Development6. Problems & Challenges of SMEs & Youth Empowerment7. Conclusion

SMEs Development in Nepal: A Contextual Exposition

• In Nepal, a small-sized enterprise is a company with fewer than 50 employees (<30 million rupees), while a medium-sized enterprise is one with fewer than 250 employees (30-100million).

• SMEs are usually small own or family managed business with its goods and services being basic.

• SMEs also tend to lack the organization and management structure, which characterize large-scale entrepreneur (LSE).

• Urban SMEs tend to be more structured than their rural counterpart.

• SMEs comprise a substantial part of the economic activity of developing countries.

1980s; Nepal has shifted to an open market regime

2001; 96% SME of Total Industry,80% Employment Generation, 80% share on GDP of Total Industry

Tenth National Development Plan (2002-2007); MSE development has been cited as an important development strategy

Public and private sectors and cooperatives; three pillars of development

2009 BS; Establishment of “Youth and Small Entrepreneur Self-employed Fund”

2005/06

2006/07

2007/08

2008/09

2009/10

2010/11

2011/12

2012/13

2013/14

0

10000

20000

30000

40000

50000

60000

70000

8052

8421 458703 463 850 853 1568 1670

61379

52168230

130741317413808171551749619226

Cottage and Small Enterprises in Nepal

CottageSmall

Axis Title

(Source:http://www.dcsi.gov.np)

Funding Windows for SMEsFamily and Relatives

Financial Institutions

International Agencies

Government Financing

Government Activities to SMEs Development & Youth Empowerment

Establishment of “Youth and Small Enterprise Self-employed Fund” in 2009 BS.

Creation of “Employment Fund” with the joint co-operation between Swiss Agency for Development and Co-operation, UKAID, WB & GON.

Establishment of MEDEP in 2001 with collaboration of UNDP “Woman Entrepreneurship Development Fund” which recently

offers the credit from Rs.100,000 to 500,000.

Impact of SMEs Development on Youth Empowerment

• Poverty reduction• Decrease in brain drain• Increase in employment• Investment friendly environment in the country• Concept of self-reliant

SMEs Contribution to Economic Development

Economic transformation and poverty alleviation Capacity Formation Technological/Industrial Development Promoting Growth Industrial Dispersal Backward and Forward Linkages Technological Acquisition

Entrepreneurs and Employment

2007/082008/092009/102010/112011/122012/132013/140

10000

20000

30000

40000

50000

60000

70000

80000

1957 4289

1416318740 19779

63304

36624

16590

6801872918 73443

36222 38664 EntrepreneurEmployment

(Source:http://www.dcsi.gov.np)

Employment Generation

Problems & Challenges of SMEs & Youth Empowerment

Inadequate Access to Finance Capital Inadequate Infrastructural Base Inadequate Information Base Low Entrepreneurial Skills Poor Policy Implementation Lack of access to capital Insufficient quality and quantity of products and Lack of access to local and international markets

Conclusion There is no doubt that small and medium scale enterprises are

essential for rapid and sustained economic growth and development.

Most of the Nepalese SMEs are involved in processing and manufacturing of food items, consumer and household goods, and textiles and related products, both for exports as well as the domestic market.

The potentials of SMEs have not been fully harnessed due to poor implementation of the seemingly promising policies and inadequate financing of the SME.

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