Investment Climate

Entrepreneurs know that it is not about profits, it is about reinvesting your gains to grow

An entrepreneur, owning a coffee, hotel, and hospital

Why does anyone want to invest in starting a business? For starters, I guess we might all think highly of our ideas and that we will succeed. Obviously, it is quite the difference. Failure prevails and society’s reaction to our misfortune is oftentimes hazardous to our health (and employability). Still, I am convinced it’s all worth it! Nevertheless, I also believe in doing proper research and understand your opportunities, even though you can never be sure.  Market research is one thing, but as we learned in the last section, ‘the whole region is virgin to all ideas’. In Nepal there are barely any saturated markets. In fact, some we might expect do not even exist – for the better or worse. And, yet, others are largely underdeveloped. So, does that mean that finding investors is easy?

“There is high investment potential in the region but if you look at it this potential is not used

A business tycoon and respectful mentor for young entrepreneurs

There are many reasons why funding is hard to get by, one being the small-scale investment opportunities yet another the meager returns. One of the many reasons why most entrepreneurs we interviewed draw their funding from family members and personal savings. Another, perhaps, the perception of Nepal being a disaster-ridden country; in a constant state of emergency. Frankly, not necessarily a rumor, considering yearly floods and the Himalayan region’s susceptibility to earthquakes. However,

Agriculture-based tourism is the future of the province

Minister of Agriculture and Tourism

A claim we heard often during our interviews. One that seems very reasonable and appears obvious when frequently being stunned by Nepal’s natural beauty. Nevertheless, I would have to lie if not any risk assessment would flag the issue of natural disasters. No matter if it is risking losing an entire harvest, suffering through severe property damage, or losing human lives.

Economic agents are risk-averse. They will always try to minimize risks. Insurance provides a pragmatic solution to minimize losses from various risks through a risk-sharing mechanism. A solid insurance sector promotes entrepreneurship and boosts investor’s confidence.

Samriddhi Foundation, Co-Author

Though there are claims for and even companies providing such disaster-risk insurance, they are not only costly, but also subject to various conditions. In addition, entrepreneurship usually starts small and is regional. So, the investments are too little to become part of a large-scale insurance scheme (cf. UNISDR).

Particularly, considering agriculture-based tourism ventures, which seem to be one of the best options Nepal has been given. A given, because it has unique natural resources. In fact, besides finding funding sources, resources are the second attribute within the investment climate dimension we tried to understand. On the one hand, as it is easier to attract investors to unique offerings. On the other hand, as Nepal’s trade deficit has been said to be one of the main contributors to its economic problems.

If the whole hills collapse, we won’t have a place to live anymore

A concerned citizen and tomato farmer

One of the more peculiar quotes! Though, here we could have a look over the border and see what India has been doing: growth by all means necessary! Maybe, it would help Nepal in the short-run, forgoing environmental concerns in the name of industrialization. Though, please allow me to be partial, and disagree. I believe Nepal can become the first country that is entirely self-sustainable; a sort of circular state-economy. Though, to do so would require everyone to pull in the same direction, which, however, is not the case and is explored in the next chapter >>here.