Driving Growth and Innovation
Women’s entrepreneurship is a key driver of economic growth in many countries, including Nepal. A study from global management consulting firm McKinsey & Company found that a ‘full-potential’ scenario, where women participate in the economy equally to men, could add up to $28 trillion, or 26%, to annual global GDP in 2025 compared to a business-as-usual scenario. This impact is roughly equivalent to the combined size of the US and Chinese economies today.
McKinsey & Company also analysed an alternative ‘best-in-region’ scenario, where all countries match the improvement rate of the best-performing country in their region. This could add as much as $12 trillion to annual 2025 GDP, equivalent to the current GDP of Japan, Germany, and the United Kingdom combined, or twice the likely growth in global GDP contributed by female workers between 2014 and 2025 in a business-as-usual scenario.
Women entrepreneurship in Nepal
The Government of Nepal has long promoted women’s entrepreneurship, making it a focus of policy discussions. While significant progress has been made in recent years, according to Shova Gyawali, President of the Federation of Women Entrepreneurs’ Associations of Nepal (FWEAN), “We have 5,500 members in our network, all of whom have registered their businesses, a prerequisite for FWEAN membership.”
Alongside supportive policies, skilling, mentoring, incubation and inventory development support have created an enabling ecosystem for women entrepreneurs. This environment is crucial for women entrepreneurs to formalise their traditional businesses. “We can see younger generations taking over family businesses, scaling them up and adding value through innovative ideas after studying abroad,” said Pramila Acharya Rijal, Founder President of the South Asian Women Development Forum (SAWDF). “This is largely due to the enabling environment provided by the government.”
Some women entrepreneurs are engaged in a new form of entrepreneurship called ‘social entrepreneurship’, which prioritises social responsibility and impact over profit-making objectives. Social enterprises can operate as non-profit, for-profit or hybrid businesses, depending on the preferred business model and available funding.
Many self-made entrepreneurs have achieved success by translating their vision, innovation, ideas, and skills into action. Additionally, various initiatives, such as startup development programmes and national and international awards, motivate and encourage innovative ideas. Women are also increasingly taking the lead in family businesses that have been passed down through generations.
The National Economic Census, 2019, revealed a growing number of women-owned enterprises, accounting for 27% of all enterprises.
Major policy initiatives
All three tiers of government have implemented programmes to support women’s entrepreneurship. The Industrial Enterprises Act, 2020; Startup Enterprise Loan Operation Procedure (2081); fiscal budgets of all three tiers of government; Unified Guidelines, 2075 for Interest Subsidy on Subsidised Loan (3rd Amendment, 2077); and the Youth and Small Entrepreneur Self-employment Fund have clearly defined provisions to support women entrepreneurs. Gender-based budgeting is a key strategy to empower women economically and socially.
Nepal Rastra Bank (NRB), the central regulatory and monetary authority, has also provisioned subsidised interest rates for loans to women entrepreneurs. Recently, the government announced a more favourable policy for startups, offering loans of up to Rs 2.5 million at a subsidised interest rate of 3% with a five-year repayment period through the Industrial Enterprise Development Institute (IEDI).
The fiscal budget of 2023/24 allocated one billion rupees to the Startup Fund and announced plans to establish incubation centres in every province to support startups. Additionally, the budget encouraged banks and financial institutions to extend loans to startups based on project collateral. To further promote women’s entrepreneurship, the government has outlined plans to construct exhibition halls in Chobar, Kathmandu, through public-private partnerships. It also aims to promote a trade portal for branding products made by women and establish a souvenir house for their sale.
Moreover, the Industrial Enterprises Act 2020 stipulates that industries or firms registered with a sole female owner are entitled to a 35% exemption on registration fees or charges under prevailing laws. Additionally, a 20% exemption is granted on fees or charges for registering industrial property to be used in such industries.
Similarly, the Industrial Enterprises Act 2020 prioritises women entrepreneurs in establishing industries in industrial zones and villages, and facilitates export loans for them.
NRB also provides a 5% interest subsidy for micro, cottage, small and medium-scale industries involved in processing and producing primary agricultural products like milk, vegetables, fruits, fish, meat, grains, tea, coffee, spices, organic and biological fertilisers, and Ayurvedic medicines from herbs.
Additionally, the Startup Enterprise Loan Operation Procedure, 2081, offers loans of up to Rs 2.5 million at a 3% interest rate with a five-year repayment period, using the enterprise or project itself as collateral. Entrepreneurs can submit only one proposal and must declare that they have not received concessional loans from other agencies.
According to Umesh Kumar Gupta, Executive Director of IEDI, proposals will be evaluated by a panel of experts based on various criteria, including innovation, technological application, business plan quality, job creation potential, local resource utilisation, infrastructure availability, financial soundness, and management capacity. “Concessional loans will range from Rs 500,000 to Rs 2.5 million, with a maximum five-year repayment period,” he said. “Entrepreneurs with outstanding concessional loans from other sources will not be eligible.”
This programme aims to provide favourable loan conditions to entrepreneurs with the latest knowledge, skills and competencies to launch startup ventures.
Experts have emphasised the importance of creating opportunities to motivate youth to stay and develop their futures within Nepal, given the significant youth outmigration. Fostering youth and women’s entrepreneurship is a crucial strategy to achieve this goal, and the government’s startup loan scheme is a commendable step in this direction.
The Youth and Small Entrepreneur Self-employment Fund (YSEF) primarily focuses on training and guidance for uneducated and unemployed youth, offering collateral-free credit with subsidised interest rates through various banks and financial institutions. This enables them to secure employment and improve their livelihoods. YSEF is specifically designed to cater to economically disadvantaged groups, women, Dalits, indigenous nationalities, conflict victims, youth and communities with traditional skills in commercial farming, agri-based enterprises, and service-oriented self-employment.
Additionally, private sector umbrella organisations have been promoting women’s entrepreneurship by establishing separate wings for youth and women within their organisations.
Challenges and future outlook
Embracing entrepreneurship in Nepal is a challenging endeavour. Property rights, access to finance, skill gaps, technology adaptation, lack of market opportunities, and the emerging challenges of climate change hinder women entrepreneurs from progressing. Studies reveal that banks often perceive women as less creditworthy, leading to reluctance in lending based on the assumption that they may abandon their businesses at any time. As a result, women entrepreneurs are often compelled to rely on personal savings, if available, and minimal loans from friends and family, which are insufficient to support entrepreneurial ventures. Political unrest and natural disasters further disrupt businesses and create uncertainties for entrepreneurs.
Nepali entrepreneurs, including women, are also grappling with the challenges of post-pandemic recovery. Like in many countries, Nepali women entrepreneurs faced significant difficulties during the COVID-19 pandemic. Lockdowns, travel restrictions, adverse impacts on tourism, and disruptions in supply chains severely affected businesses, leaving many struggling to recover. However, many women-led businesses demonstrated resilience by adapting and leveraging digital tools such as e-commerce and online services.
Looking ahead, the future of women entrepreneurship in Nepal appears promising as more women gain access to education, skill development, technology and financial resources. Efforts to foster a supportive ecosystem, provide business training, and ensure equal opportunities will be critical in empowering women entrepreneurs to succeed. Additionally, the growing use of technology and e-commerce is opening new opportunities for women in rural and remote areas to scale their businesses and access global markets. Despite the challenges, women entrepreneurship in Nepal continues to grow, making a significant contribution to the economy and society. The ongoing efforts of the government, private sector, financial institutions, non-governmental organisations and international bodies remain essential in creating a more conducive environment for women entrepreneurs to thrive.
Success stories
Despite challenges, women entrepreneurs have been achieving remarkable success through their passion and dedication.
Laxmi Sharma, Proprietor, Laxmi Wood Craft
Laxmi Sharma is renowned as Nepal’s first female tempo (auto-rickshaw) driver. She established Laxmi Wood Craft in 1982 and was a top exporter of wood carvings to the USA until 2001/2002. Following a shift in market preferences, she pivoted to producing buttons and exporting them to Germany, Switzerland, Zambia, Denmark and the USA. She has also contributed to river sanitation efforts in Kathmandu. Her industry has provided craft and carving skills to over 4,000 individuals. At the peak of her export business in 2001/2002, over 575 workers were employed in her industry. Sharma’s resilience and self-made success make her an inspiration to many.
Shilshila Acharya, Director at Avni Center for Sustainability
Shilshila Acharya is a social entrepreneur recognised as one of the BBC’s 100 inspiring and influential women of 2024. She is the founder of Avni Ventures, one of Nepal’s largest plastic recycling networks. A prominent climate and waste educator, her organisation employs people from marginalised communities, transforming waste into sustainable products and promoting crafts and jewellery made by indigenous artisans, thereby supporting their livelihoods.
At the age of 19, Acharya realised the urgent need for young people to address environmental issues and contribute to solving global environmental problems. She declined a fully funded MBBS scholarship from the Nepal Government to pursue Environmental Science at Kathmandu University. She later earned a master’s degree from Nepal and Norway. With over 13 years of experience, she has successfully combined environmental, social and economic issues to innovate and implement solutions that create green jobs for marginalised people, particularly women.
Sushma Sharma, Founding President, Women CAN/ CEO & Founder, Phool Prasadh
Sushma Sharma brings over 30 years of professional experience in various managerial roles within the government and private sectors, including banking and financial institutions. Currently, she leads Women CAN, an organisation dedicated to the economic empowerment of women in Nepal. As a first-generation entrepreneur, she has founded two successful ventures: Phool Prasadh, a company producing incense sticks from floral waste, and Himalayan Tranquility, a premium tea business.
Phool Prasadh’s journey began with product ideation and has progressed to early-stage production, gaining significant market share locally and exploring further scaling opportunities. Sharma believes that consistent hard work, unwavering motivation, and a positive attitude are essential for success. The pandemic underscored the importance of mental stability and positivity in navigating uncertainty. Despite challenges and setbacks, Sharma remains a resilient and dedicated entrepreneur, actively contributing to various business, industry, and social organisations. Her ventures and leadership roles have made a positive impact.
Shobha Gurung, Proprietor, Himalayan Decor Rugs
Shobha Gurung, former Vice-President of the Federation of Nepal Cottage and Small Industries (FNCSI), is the proprietor of Himalayan Decor Rugs. Himalayan Decor Rugs Pvt. Ltd. specialises in producing carpets and selling them in both local and international markets. The company is renowned for its exceptional designs and product quality. Gurung is recognised for successfully managing this labour-intensive industry, creating employment opportunities, and contributing to the country’s foreign currency earnings through exports.
Prativa Pandey, Founder/CEO, Catalyst Technology
Prativa Pandey is a researcher in the Department of Biodiversity and Natural Products at the Research Institute for Bioscience and Biotechnology (RIBB), Kathmandu, Nepal. She is also the founder of Catalyst Technology, a science and technology (S&T) research and product development company that focuses on value addition through technical interventions to address existing market challenges. She received the prestigious OWSD Early Career Fellowship in 2019 to conduct research on the valorisation of citrus fruits in Nepal. Additionally, she was honoured with the national-level Science and Technology Award by the Nepal Academy of Science and Technology in 2019 for her outstanding contributions to S&T research and development in Nepal.
With a decade of research and industrial experience, including international publications and US patents, she holds a Ph.D. in Chemistry from Northwestern University (US), a Management Certificate from the Kellogg School of Management (US), and a B.S. Honours in Chemistry from Salem College (US). Currently, her research focuses on adding value to Nepal’s Medicinal and Aromatic Plants (MAPs). She also founded Herveda Botanicals, a natural skincare company rooted in four years of research on MAPs and indigenous knowledge in Nepal.
Pandey is actively involved in science advocacy, supporting science and technology and intellectual property policy dialogues, mentoring students and professionals in STEM (science, technology, engineering, and mathematics), participating in panel discussions, and advising various organisations.
Nikita Acharya, Co-founder, UG Cakes
Nikita Acharya is the CEO and Co-founder of Urban Girl and UG Cakes. She was featured in Forbes Asia’s 30 Under 30 list for 2020 in the e-commerce and retail category. Acharya has successfully built a team of 60 young professionals in her business. She launched her first venture at the age of 19, as an undergraduate student, with an initial investment of just $100.
‘FWEAN has been empowering aspiring women entrepreneurs to reach their full potential, grow their businesses, and thrive’
Shova Gyawali is the President of the Federation of Women Entrepreneurs’ Association of Nepal (FWEAN) and a Life Member and Executive Committee Member of the SAARC Chamber of Commerce and Industry. She is a publisher, author, and media owner, as well as the director of Nepal Republic Media Pvt. Ltd. Additionally, she serves as the President of the Nepal-Philippines Chamber of Commerce and Industry. The HRM Nepal had a conversation with Gyawali on a wide range of issues related to women’s entrepreneurship. The following are excerpts from their discussion.
Q. As the leader of the Federation of Women Entrepreneurs’ Associations of Nepal (FWEAN), what are the key initiatives you’ve overseen during your presidency that you’d like to highlight?
A. I have been leading the Federation of Women Entrepreneurs’ Associations of Nepal (FWEAN) for over a year. FWEAN has a long history of empowering women socio-economically, and it is the sole umbrella organisation for women entrepreneurs in Nepal. We have been expanding our district and local chapters, now reaching 71 districts and even establishing ward-level chapters. Our Executive Board, composed of 27 members representing all seven provinces, actively works to create a favourable policy environment for women entrepreneurs.
FWEAN’s four primary objectives are advocacy, business development, capacity building and networking. We organise a large-scale product exhibition fair that brings together women entrepreneurs from across the country and South Asia. This platform highlights niche products from remote districts, which often lack market access, proper labelling, packaging and branding. Our goal is to connect these entrepreneurs with markets, educate them on market trends and consumer preferences, and foster networking opportunities.
We encourage informal entrepreneurs to register their businesses and join FWEAN. Once registered, we provide training in governance, leadership and other soft skills. Currently, our membership base stands at 5,500 members nationwide.
Q. What obstacles have you encountered while promoting entrepreneurship in Nepal, particularly for women?
A. Promoting entrepreneurship outside major cities is challenging. Women, in particular, face significant hurdles due to factors like illiteracy, limited property rights, lack of access to finance and skills, and societal and familial pressures. Balancing family obligations with entrepreneurial endeavors also poses significant challenges.
Despite these obstacles, FWEAN has been actively supporting aspiring women entrepreneurs to realise their potential and grow their businesses. We recognise the difficulties women face and are advocating for a supportive policy environment. To address market access issues, we are urging the government to prioritise domestic products in its procurement practices, as the government is a major consumer of goods and services.
FWEAN is facilitating inter-province and national-level exhibitions to connect entrepreneurs from Terai, Hill, and Mountain regions. We are also organising inter-district exhibitions to promote the products of women entrepreneurs.
Q. The government has repeatedly announced its intention to prioritise domestic products in government offices. However, implementation challenges persist. What are your thoughts on this issue?
A. Favourable policies are essential for promoting women’s entrepreneurship and increasing the consumption of domestic products. In response to our repeated advocacy, the government has invited FWEAN to participate in policymaking bodies like the Industrial Promotion Board and Special Economic Zone. We have also been included in state-level delegations.
Previously, the government offered loans of up to Rs 5 lakh to women entrepreneurs at nominal interest rates and without collateral. However, a significant portion of these funds remains unutilised due to their insufficiency. Recently, the government announced a more favourable policy for startups, providing loans of up to Rs 2.5 million at a subsidised interest rate of 3% with a five-year repayment period. This policy benefits women entrepreneurs as well.
We have been actively promoting the slogan ‘Use Domestic Products to Promote Domestic Entrepreneurship’. In collaboration with the Ministry of Industry, Commerce and Supplies, we have proposed a policy to mandate the use of domestic products in government offices for at least two days per week. This initiative has the potential to significantly impact entrepreneurship development.
Q. How effective do you think is the policy issued by the government to promote startups?
A. Approximately 500 startups have already utilised these resources, with 49% led by women, according to the Industrial Enterprise Development Institute (IEDI). This year, over 6,000 applications have been submitted. As many young people are compelled to migrate, such schemes can empower women to create employment opportunities within the country. Given that a significant portion of the migrant population is male, empowering women economically could encourage these men to return and scale up family businesses.
We have observed that women often possess skills in weaving, cooking or producing goods for household use that can be commercialised with modern designs to cater to consumer preferences. Their dedication to work is truly commendable. This phenomenon isn’t unique to Nepal; I have witnessed similar trends in other countries. During a recent visit to Manila, Philippines, I was impressed by the popularity of domestically produced biscuits, cookies and coffee. These products were widely available in airports, government offices and other public spaces. I had the opportunity to meet and interact with the entrepreneurs behind these businesses, many of whom have been in operation for generations. Their granddaughters, equipped with higher education, have taken over these businesses, modernising products and adding value through high-quality standards, labelling, and packaging. This approach offers valuable lessons for Nepal.
Q. It is often said that entrepreneurship development is a multidisciplinary endeavour that thrives in a supportive ecosystem. Do you agree with this statement?
A. Yes, I agree. Entrepreneurship requires a multifaceted approach, encompassing skills, financing, product development, efficiency, risk management, market access and more. As the umbrella organisation for women entrepreneurs, we encourage them to introduce their products to the market. While market penetration can be challenging, ultimately, consumer choice prevails. However, we are witnessing gradual progress. For example, traditional Nepali candy, or ‘pustakari’, is now available in high-quality versions produced by multiple households in Ilam. Recently, I recommended a foreign envoy to stay at a homestay in Ilam, and they were highly impressed with the service.
To enhance skills, we collaborate with the Department of Cottage and Small Industries to organise training programmes in various districts based on the needs of local entrepreneurs. Our flagship event, the Women Entrepreneurs Expo, held around International Women’s Day (March 8), provides a platform for entrepreneurs to showcase their products and participate in international women’s conclaves to discuss pressing issues like climate change, disruptive technologies and LDC graduation.
We are also exploring the potential of precious stones, such as quarrying and processing, as a game-changer for Nepal’s economic development. Additionally, FWEAN is a vice-chair of the Regional Network of Women Business Organisations, an Asia-Pacific network established by the Centre for International Private Enterprise (CIPE).
Q. Given that climate change disproportionately affects women, how is FWEAN addressing this issue and supporting women entrepreneurs in adapting to its impacts?
A. In recent years, we have faced unprecedented challenges, particularly the devastating impacts of climate change. Women are disproportionately vulnerable to these effects, and we must take urgent action to protect them. The COVID-19 pandemic highlighted the importance of digital solutions, as virtual conferences, digital marketing and e-commerce became essential tools for business continuity.
To address the impacts of climate change, we are collaborating with various organisations and stakeholders to implement adaptation and mitigation strategies. For instance, if coffee production is affected by climate change, we could explore cultivation at higher altitudes or identify suitable alternative crops. We are also exploring insurance options to safeguard women entrepreneurs from climate-related risks.
Last year, we organised a discussion on the impacts of climate change, featuring a keynote speech by Dr. Mariyam Shakeela, former Minister for Energy and Environment of the Maldives and a key negotiator of the Paris Agreement. Nepal’s challenges, such as the melting Himalayas, are intertwined with global issues like sea-level rise, which poses a significant threat to coastal nations like the Maldives.
Q. Given FWEAN’s 5,500-member base of dedicated women entrepreneurs, how is the organisation facilitating international market linkages for them?
A. FWEAN organised its first Women Entrepreneurs Fair in Melbourne, Australia, on December 14-15, 2023. This event provided an opportunity to showcase Nepali products, promote tourism, foster cooperation in entrepreneurship development, and facilitate cultural exchange between Nepal and Australia. We have been collaborating with the Nepali diaspora community to promote Nepali goods, and we are optimistic about the potential for growth in both trade and the Nepali diaspora.
Q. The Ministry of Foreign Affairs (MoFA) recently decided to establish a separate division for economic diplomacy. Do you believe this initiative will effectively promote trade, investment and tourism by enhancing the capabilities of our diplomatic missions abroad?
A. Economic diplomacy has gained significant attention in recent years, yet we have been somewhat behind in this area. Our diplomatic missions have the potential to play a crucial role in promoting trade, tourism and investment. However, realising these goals requires consistent engagement, follow-up and promotion to facilitate exports and attract investment. To achieve this, it is essential for the Ministry of Foreign Affairs to empower our embassies with the necessary resources and capabilities.
Q. Given Nepal’s federal structure with three tiers of government, how effective have subnational governments been in promoting entrepreneurship?
A. We maintain strong collaborations with subnational governments, organising policy dialogues in all seven provinces. As FWEAN president, I have travelled extensively to explore potential and engage with local governments to catalyse entrepreneurship development. Subnational governments have implemented various programmes, including the President Women Upliftment Programme (PWUP), to promote women’s entrepreneurship.
Through these dialogues, we identify opportunities and challenges for entrepreneurs and advocate for solutions from all three tiers of government. We invite chief ministers and mayors to review existing policies and their implementation. We also highlight any obstacles and seek support from all levels of government. Local governments have expressed willingness to collaborate on initiatives proposed by organisations like FWEAN, including industrial estate development. This collaborative approach between FWEAN and subnational governments is promising and essential for achieving our goals.
