Nepal—Nepal in Business (NIB)

Nepal aspires to upper middle-income status by 2030. Such an ascent will require Nepal to transform the economy and diversify from low-productivity agriculture to higher value-added activity while creating jobs for its growing workforce. The Government of Nepal needs to improve the business environment, starting with promising export sectors and invest in infrastructure, especially renewable energy, tourism, and social services. For its part, the private sector will need to invest to grow in new markets and to hire and build the skills of the Nepali workforce, all of which require improved access to financial and business support services. Women and disadvantaged groups also need better inclusion.

The Foreign, Commonwealth, and Development Office (FCDO)-funded Nepal in Business (NIB) Program works with Nepali entrepreneurs and policymakers to support small and micro-enterprises (SMEs) that are tightly aligned with program goals while enhancing the broader business landscape.

NIB aims to unlock economic prosperity by driving transformational economic growth, promoting economic diversification, and reducing poverty. It will do this by addressing key constraints in Nepal’s private sector development through two components: a Business Support Facility (BSF) and a Business Environment Reform Facility. The five-year program aims to democratize access to capital in the underdeveloped SME ecosystem—financial, knowledge, and social capital—by providing finance and introducing interventions to enhance SME organizational capabilities and productivity. The program will leverage FCDO’s global network to connect Nepali products and services with international markets.

NIB will also promote more inclusive business models and poverty reduction by prioritizing jobs for women and people from disadvantaged groups. Our localized approach will ensure that we build national capacity sustainability so that NIB impact outlasts its interventions.

To kickstart the program, DAI is:

• conducting a scoping study and political economy analysis to deepen DAI’s understanding of sectoral policy bottlenecks, regulatory ambiguities and inconsistencies, key stakeholders, and operating space;
• developing a BSF investment strategy based on detailed mapping, analysis, and prioritization of key sectors, geographies, organization capabilities, political economy, and business support services, and
• mapping the current state of dialogue in Nepal to understand the most critical issues for dialogue and the potential readiness for dialogue of relevant stakeholders.

DAI’s delivery partners are Tandem, Beed, SAFAL, Dolma, VRock, and Opportunities Unlimited.

Sample Activities

• Understand market and government failures limiting firms from growing, creating jobs, and enhancing competitiveness in focal sectors.
• Provide a more comprehensive array of complementary business development services, financial products and services, and policy interventions.
• Prioritize creating jobs for women and adopt a gender-aware approach, shifting the onus onto businesses to act as agents of change.