Saturday Aug 13, 2022
Saturday Aug 13, 2022

Business during times of uncertainty

Small enterprises fighting the COVID odds

2021 May 06, 17:10, Kathmandu
All set for business before 9 am. Photo : Anamika Tamang

According to a survey conducted by the International Finance Corporation, small and medium-sized enterprises in Nepal saw their sales dwindle by over 80 per cent amid the COVID-19 pandemic. It also mentioned that the coronavirus pandemic hit the livelihoods of numerous people with average monthly income down by 95 per cent.

The Central Bureau of Statistics too published data in February which stated that in fiscal year 2076/77 per capita income in the country declined by $25.

And now with the second phase of the prohibitory order in place it is the small and medium scale businesses that have to bear most of the economic brunt.

Rita Mainali, who owns a grocery store in NakkhuDobato, says, “Most people these days prefer going to the big stores like Bhatbhateni to buy their daily needs so business is not as it used to be in the previous days.” And with the prohibitory order being imposed at the moment, she says it has become even more difficult to get customers.

Though such businesses are small in nature when we take them collectively the contribution that they make to the national economy is tremendous.

Be it production, employment generation, exports or the gross domestic product (GDP), the role of such small enterprises in Nepal’s economy cannot be overlooked. They, in fact, as per the Ministry of Finance contribute 22 per cent to the national GDP and employ around 1.7 million people, states a report titled ‘Small and Medium-sized Enterprises in Nepal: Examining constraints on exporting’ published by the Asian Development Bank Institute.

Since such businesses have low capital and less services and goods to offer, every time there is a restriction of any type,it is the entrepreneurs involved in these businesses who suffer the most.

“Since Wednesday, we are being allowed to open only from 7 to 9 in the morning,” Mainali says, adding, “Such restrictions literally kill us as we do not have enough time to make the amount of sales needed to just survive let alone make profits.”

She shares it would have been a lot easier if they were allowed to open their shops in the evenings too. “We had to incur huge losses during the previous lockdown and life was just about getting back to normal and suddenly we are hit with the prohibitory order again,” she laments.

To put things into perspective, we can have a look at a study report released by the National Planning Commission – the country’s apex planning body – which states that an additional 12 lakh Nepalis have fallen below the poverty line due to the nationwide lockdown imposed by the government to curb the spread of the coronavirus in the country. The number of people that have fallen below the poverty line due to this crisis is equivalent to 4 per cent of the total population.

GyanuMaharjan, a vegetable shop owner from Nakkhu, shares that the flow of customers has dropped drastically since the prohibitory order was imposed. “I have a very small shop which is my only source of income and I am scared that the COVIDsituation could worsen and restrictions could become stricter,” she says.

If that does happen then Maharjan says she does not know what she will do. “Even at present I have to throw away most of the vegetables as there are so few customers,” she shares. What is also very heart wrenching, she says is that the government talks about introducing various policies to help us get through such trying times but nothing really happens. “And even if the government does implement any policy it is those with connections to people in power that reap the benefit.”

Meanwhile, Sanjeev Kumar Pal, who sells grocery items in Kharibot of Nakkhu, says he is thinking of opening a vegetable store as people consume them daily. He feels that there is more profit to be made selling vegetables unaware of the difficulties that Maharjan is facing at the moment.

“I previously used to sell only ‘paan’ (betel) but I added groceries too because during such restrictions the government allows shops selling food items to open,” he shares.

“I have a family to feed and loans to pay. I also have to pay the rent for my shop and the room where I stay,” says Pal. “If such restrictions are imposed frequently then life will become a horrid cycle of debts.”

GDP covid-19 International Finance Corporation Asian Development Bank Institute
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