Sun, 02 Oct 2022

KATHMANDU, July 19 (Xinhua) -- Sumitra Palanchoke, a woman entrepreneur from Lalitpur in Nepal's Kathmandu Valley, was struggling for fund to start her new business venture related to bamboo-made clothes, as her cash flow ran out due to orders canceled for her pashmina products from abroad.

Thanks to the interest-subsidized concessional credit scheme of the Nepali government, Palanchoke could get 1.5 million Nepali rupees (12,542 U.S. dollars) from the Nepal Bank, the oldest semi state-owned bank in the country.

Under this scheme, a businesswoman can receive a maximum of 1.5 million Nepali rupees without collateral and a subsidy of 6 percent in the interest charged by the bank.

"Receiving the loan at a subsidized interest rate was a great help for me at a time when my pashmina business suffered," Palanchoke Told Xinhua. "I decided to take the loan under the scheme because of cheaper interest rate."

Palanchoke makes clothes by mixing the threads of bamboo and cotton, which she said is a rare business in Nepal.

She is one of more than 50,000 businesswomen who have received loans under the government credit scheme launched in the 2018-19 fiscal year. By mid-July 2019, only 796 women entrepreneurs had got credits under this program, but the number grew to 6,682 by mid-July 2020, and further to 50,513 by mid-June 2021, according to statistics released by the Nepali central bank.

Meanwhile, the total amount of loans extended to woman entrepreneurs had surged to 44.66 billion Nepali rupees (373 million U.S. dollars) by mid-June 2021, from just 4.35 billion Nepali rupees (36 million U.S. dollars) by mid-July 2020.

"One of the reasons why so many women received concessional loans is that the central bank made it mandatory for banks and other financial institutions to provide such loans through its directives," Darshana Shrestha, a vice president of the Federation of Woman Entrepreneurs' Associations of Nepal, told Xinhua.

The Nepali central bank has made it mandatory for a commercial bank to provide concessional loans to at least 500 borrowers, with each branch servicing an average of 10 borrowers. In addition, development banks and finance companies need to provide such loans as well.

"The woman entrepreneurs' need for finances has been matched by the banks' provision of credits under compulsion and it has contributed to a rise in lending under this scheme," said Shrestha. She added that only a limited number of businesswomen have been loaned as much as 1.5 million Nepali rupees.

Besides woman entrepreneurs, anybody involved in commercial farming, the educated youth, returnee migrant workers, Dalit (a downtrodden caste) youths, and people affected by the 2015 earthquake can get credits as well from the government scheme.

By mid-June, a total of 96,852 people had benefited from the scheme. Still, businesswomen were the major beneficiaries of the scheme, since they had accounted for over 50 percent of the total borrowers, according to the Nepali central bank.

Bhuvan Dahal, president of the Nepal Bankers' Association, told Xinhua that all the concessional loans meant for women entrepreneurs might not have reached them given the tendency of people to register firms in the name of women just to get cheaper loans.

"Regardless of this possibility, it is encouraging that at least the firms have been registered in the name of women and the women have been able to come out of the periphery of their houses and deal with banks and tax offices," said Dahal, who is also the chief executive officer of Sanima Bank. "This has contributed to their empowerment."

Dahal's bank has offered loans to around 20 people, with businesswomen topping the list.

The concessional loans have helped women grow their businesses, though they could not spare themselves from the COVID-19 pandemic.

With loans from the Nepal Bank, Palanchoke is increasing the production capacity of her business.

"I have seen a lot of scope for my new venture after seeing the response to the limited products that we have been able to produce so far in the last nine months," said Palanchoke, owner of Kohinoor Handicrafts Pvt. Ltd.

"My focus for the long term has been the pashmina business. Now I'm focusing more on the new venture and I plan to expand the domestic market for the bamboo-made clothes," she said. She is not making big investment for now due to the uncertainty created by the coronavirus, but has plans to invest more in the future.

According to the Economic Census Report 2018 released by Nepal's Central Bureau of Statistics, women were owning around 30 percent of the enterprises in the country.

There were 923,356 enterprises across the country and women owned 247,880 of them, according to the report. (1 U.S. dollar equals 119.27 Nepali rupees)

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