ECONOMIST KANCHA

Social Venture Fund in Nepal

2012-02-07T11:26:00.001-08:00

In recent years board range of organisations hasshown interest in adopting impact investing model to investing in the low income countries . List includes but not limited to investment banks,sovereign wealth funds, and endowments, philanthropic foundations and,international development organization. Traditionally, inflow of foreigncapital (not including remittances) in developing countries like Nepal has taken place in the form of investmentdesigned to maximize financial returns, while no intentional consideration ofsocial impacts or foreign aid structured to maximize social return, while noexpectations for monetary returns. Impact investing provides a platform toblend capital from both foreign aid and foreign investments to supportentrepreneurship culture in the developing world. Impact investoroperates in the missing middle andfills the capital gap above micro-financing and below institutional financing.They structure there their investment vehicle like a venture capital/privateequity fund and investment in businesses in the firm of equity, quasi equity ordebt. Some of the investors are also willing to accept below the marketfinancial returns in order to maximize social and environmental returns

To my knowledge their no impact investing fundscurrently operating exclusively in Nepal, however; there are few initiatives inthe pipeline. One of them is Ventures Nepal, which is one of the funds in theInternational Financial Corporation’s (IFC) SME Ventures program, which willprovide risk capital financing and complementary advisory services to smallbusinesses in Nepal. The target size of the Fund is $10 million. Venture Nepalwill make risk capital investments of up to $500,000 in small and mediumenterprises (SMEs). Another is Dolma Development Fund (DDF), structured as anon-profit domiciled in United Kingdom is currently raising $10 million toinvestment in SMEs in Nepal.DDF plan to deployed$ 10 million over a period of 3-5 years with a focus on the target sectors likerural connectivity (internet/mobile), health care, affordable private education,clean drinking water, eco-tourism and off grid renewable.

Small businesses are the backboneof any developing economy, not only do small businesses/Startup plays criticalrole of job creation and poverty reduction across Nepal they also bring wealthof replicable innovations to market. Attracting more impact investors in theNepal means more startups will have access to capital to scale and impact. Impactinvesting will extends beyond just a lack of capital; and includes the lack ofsupport, infrastructure and overlaying networks of intermediaries,institutions, and investors. One of the top priorities of the Nepal InvestmentBoard should be to ensure to put in place regulatory incentives and safeguardsto attract impact investors that helps build entrepreneurial culture and providinggrowth capital for achieving sustainable growth and quality jobs in thecountry. In the short run it is the small size foreign investments that willbuild appropriate FDI friendly eco-system in Nepal to attract large scalecommercial capital.

Nepal Investment Year and Investments in Small Businesses

2012-02-06T12:06:00.001-08:00

Another type of foreign investment …………………..

Foreign Direct Investment (FDI)can bring great advantage to the host country. It fuels economic growth, helpreduce poverty, create employment opportunities and assist building physicalinfrastructures. With the same intention, the Government has decided to observe2012-2013 as Nepal Investment Year and has setup Nepal Investment Board to spurand facilitate foreign investments in the country.

To attract foreign investments,NIB is launching promotional events like road shows in countries like India, UKand USA. NIB is targeting foreign firms that have the resources to investmentin mega projects in sectors like energy, tourism, infrastructure developmentand commercial agriculture. Dr.BRB led cabinet has also passed Investment BoardAct ,which ensures to facilitate investment above RS 25 billion through singlewindow policy. A population of 28 million, rising per capita income (mainly dueto remittances), demographic dividend, underexplored natural resources, and NonResidential Nepalis’ global network provides enormous market size and opportunitiesfor investments in Nepal.

Having said that, the governmentand other enthusiasts needs to recognize that simply declaring 2012 -2013 asInvestment year will not attract foreign investment. Capital inflow in aparticularly country depends on domestic and international Marco economicsituation and investment climate. For a traditional foreign investor risk toinvest in Nepal is very high. According to the World Bank establishedinternational sovereign rating standard, Nepal is rated CCC+. With a CCC+rating Nepal is boxed under “High Default risk” category. Additionally, due toperpetual “in-house” hurdles like militant labor, extortion, arbitrarygovernment policies, red tapes, corruption, and bandas, Nepal’s foreign privatecapital attracting capability is also very undeveloped and fragile. In 2010,Nepal attracted least amountof private commercial capital in the South Asia region. According to the WorldInvestment Report 2011; Nepal was ranked 134 out of 141 countries in the InwardFDI Performance Index. Despite the potential market opportunity in Nepal,traditional large scale investors will continue to be reluctant to invest untilissues like high investment risk and cost of capital are addressed.

While Government of Nepal through NepalInvestment Board should continue scouting for large scale investors, theyshould also spotlight and create appropriate environment to lure in a small butstrong growing breed of financers called Impact Investors. These investors arewilling to take investment risk in developing countries like Nepal andunderstand the market dynamics of low income countries to reduce the cost of capital,through innovative financial products. Capital they deploy intends to create positive social and environmentimpact beyond financial returns. These investors believe in buildingentrepreneurial culture and invest in small businesses that use market-basedapproaches to provide scalable solutions to a number of socio-economic problems. Investment are generally made in sectors that serve the people at the baseof the economic pyramid (as people earning less than $3000 per annum per capita ). Impact investors target sectors likeaffordable education, healthcare, renewable energy, access to finance and,sustainable agriculture. While government or charity solutions will sometimesprovide these products or services, impact investment can complement governmentand philanthropic capital to reach more people.

Example for Bilateral Investment Promotion and Protection Agreement

2012-02-03T18:28:00.000-08:00

Nepal- India Agreement
"There has been a lot of buzz about Bilateral Investment Promotion and Protection Agreement (BIPPA) signed on October 21, 2011 between Nepal and India. "

What is BIPPA

" BIPPA is a legal instrument that establishes specific rights and obligations to meet the primary purpose of protecting foreign investments against discriminatory measures (i.e. policy inconsistencies) by the host state. To ensure protection and promotion of investments, and to encourage capital flows along with the commitment to credible liberal economic policies, countries typically enter into investment protection agreements like BIPPA. In principle, it ensures reciprocal encouragement, promotion and protection of investments, thus enabling conditions conducive to increase investment ." Click here

Consequences of BIPPA - "Irate international investors in telecomcompanies, whose mobile phone permits were cancelled by the Supreme Court on Thursday, may sue the Indian government for damages in a global forum, even as they enlist the support of their respective governments to safeguard their investments here."

an example from India ..click here to read more

Corporate bonds & Nepali Private sector

2012-02-01T06:56:00.000-08:00

Recently read - " IFC, a member of the World Bank Group, and the World Bank are helping governments in emerging markets simplify regulations for corporate bonds, changes designed to increase the volume of non-government bond transactions and improve the diversification and performance of institutional investors’ portfolios. " click here to read more

While reading the article few thought came to my mind in context of Nepal

Our sovereign debt is rated CCC+ ..... corporate bonds are usually more risky then the government bond.
Majority of the industrial houses that needs debt,has there own subsidiary bank ( for example: Nabil Bank- Chaudary Group, Laxmi bank- Khetan group,etc...) .Are the industrial houses willing to get rated when they have acesss to capital through there financial subsidiary.
As of now, not a single major industrial houses (besides banks ) are listed in Nepal Stock Market...If they have to raise money would not it make more business sense for businesses to raise equity rather then cash ?
What else ?

Investing in Nepal- risk associated

2012-01-31T14:03:00.000-08:00

For the past couple of weeks,I have been helping an impact investing fund to write its investment prospectus.I have been doing quit a lot of research on the  potential of Nepali bottom of the pyramid market particularly in the sectors like internet connectivity,healthcare,water and sanitation, culture ,education and  education .......
Despite lot of potential,current market is very fragmented and due to the difficultly of geographic terrains, managing distributions channels is challenging .... It is inevitable for both domestic and international investors to be successfully in Nepal without addressing the hurdles like achieving economies of scale, weak distributions channels,consistent quality of the product and weak infrastructure like roads,energy,internet .... to add to that  very idea of entrepreneurship means converting problems into opportunity, at the same time making money....... ........................

so one of the requirement to make the investment decision is to gauge the overall risk associate to investment in economy like Nepal ........ to learn more about the investment decision and current economic risk in Nepal ... I emailed one of my friend ( a man with super economic and financial analysis skills) -- he replied me by writing an oped in the Kathmandu Post : )

"  A friend of mine recently sent me an email asking whether I had or knew the data on the “Country Risk Premium” (hereinafter CRP) for Nepal. He was working on an investment prospectus, and needed, among others, information on the CRP—a premium that foreign investors associate with a particular country when making their investment decisions. While I did not have any such information at that time, given the importance that foreign investors assign to such risk premium, I went to the internet and started looking around if there were any such data pertaining to Nepal.

The concept of a CRP refers to an increment in interest rates that would have to be paid for loans and investment projects in a particular country compared to some standard. One way of establishing the CRP for a country is to compare the interest rate that the market establishes for a standard security in the country, say the central government debt, to a comparable (same maturity and issued in the same currency, say US dollars) security in the benchmark country, say the US. The interest rate that is relevant is the market-determined yield to maturity rather than the coupon interest rate. Given that Nepal and other developing economies don’t issue foreign currency denominated bonds, it is difficult to calculate the CRP using this method for such countries. " click here to read

Investing in Education, Lesson from India

2012-01-23T10:41:00.000-08:00

Interesting conversation on private equity investments in education.....

Things I read today -Jan 16 2012

2012-01-15T23:55:00.000-08:00

learnt about - Cotton Mill (Nepal) ........ you guys should check it out and buys their products ...... Products are Hand Made in Nepal .......... I have not done much research on their business model , however I am hoping that success of the business leads to hiring of more and more craftsmen and artisans .... I also hope Cotton Mill (Nepal) gets an international market and help our country's export market....
Just a thought: one of their product is - Wine Bottle Gift Wrap------ so may be Cotton Mill (Nepal) should tie- up with Nepali wine manufacturers like Hinwa or others .....

Post Money Valuation of Solatee Hotel approximately $25 mill - 2011-2012

2012-01-15T23:28:00.001-08:00

"Indian hospitality chain Oberoi Hotels Pvt Ltd has sold its entire 6.84 per cent stake in Nepal’s Soaltee Hotel Ltd to Sibkrim Land and Industrial Company Pvt Ltd, for a consideration of $1.68 million, the company has said in a statement.

A total of 14,924,063 shares owned by Oberoi Hotels were transferred at Rs 140 per unit.

Khaitan & Co LLP was the official advisor for Oberoi Hotels.

While Soaltee Enterprises owns the largest stake in Soaltee Hotel, Nepal Airlines Corporation holds 12 per cent stake and Holiday Inn Investment Nepal, a subsidiary of Holiday Inn, has around 10 per cent stake. Soaltee posted a profit of around Rs 110 million during FY2010-2011 and currently employees 700 people." Source: Vccircle.com

Things I read Today - 01/17/2012

2012-01-11T23:01:00.000-08:00

Lazy days watch moved to movies but till managed to read

First few pages of - Accelerating Inclusive Business Opportunities," identifies seven inclusive business models that expand access to goods, services, and livelihood opportunities for the world’s poorest people while generating strong financial returns. These models are helping companies turn underserved populations into dynamic consumer markets and diverse new sources of supply. In the process, companies are developing product, service, and business model innovations with the potential to tip the scales of competitive advantage in more established markets as well. This report summarizes and analyzes patterns in the solutions companies with inclusive business models are using to succeed. Source: Click here to read
An article published in current Business Today ( India) - Name of the Article is Rural Marketing - Spreading light.Click here to read

Access to Energy- Nepal

2012-01-10T11:36:00.000-08:00

CLEAN ENERGY DEVELOPMENT IN NEPAL

Energy to base of economic pyramid

Click here to read

The Dolma Development Fund - Impact Investing in Nepal

2012-01-09T23:22:00.000-08:00

Very excited to learn about one of the very few Impact investing funds operating in Nepal...............

If you are a social entrepreneur working in Nepal and looking for external financing - The Dolma Development fund is interested in going over your business plan .....

"The Dolma Development Fund was founded in 2003 as a non-profit impact investor, education sponsor and development advisor. Our mission is to use commercially sustainable methods where possible to alleviate poverty in remote areas, currently in Nepal and Ethiopia. We provide both financing and advice to local projects and businesses that have a positive social and environmental impact in their DNA, and we reinvest any returns into education and other support for our partner communities. In this way our capital is essentially recycled and used multiple times for good." source: click here to read

http://www.dolmafund.org/

Affordable housing for poor and slum dwellers in Kathmandu??

2012-01-09T21:52:00.000-08:00

Current Situation -

Current slum inhabitants in Kathmandu - 50,000
Total number of slum households - 2,763 .
The number of squatter settlements has grown from 17 in 1985 to 63 today.
Below the Bagmati Bridge, there are more than 310 households in what is supposed to be 'UN Park', although it has nothing to do with the United Nations. (Source: Nepali time click here to read more)
Average Home Loan intrest rate charged by commercial banks - 14-16 %
"According to government data, nearly 430,000 families live in sub-standard housing in Nepal. The gap between the supply and demand of decent and affordable housing in Nepal is wide. In a rough estimation, about 70,000 new homes per year would need to be built to close the housing gap in Nepal." source: HABITAT FOR HUMANITY NEPAL

Picture source: Nepali times, grey dots show the slum settlements around Kathmandu

Current Solution:"

Housing Micro-Finance (HMF) programs features prominently among organizations that address the shelter needs of the urban and rural poor in Nepal. In 2005 HFH Nepal pioneered a Save and Build approach that offers housing finance to those who would otherwise not get a loan. Save and Build brings together low-income families in a community to form saving groups to save funds and materials to repair, renovate or build new homes. No collateral is needed and very simple documentation is required, which addresses some of the usual barriers that the poor face in accessing financing. Save and Build offers a flexible loan payment structure and construction process. Ultimately, this methodology supports holistic, sustainable community development, through house ownership."

"The impact of HFHI Nepal’s Save and Build program attracted the attention of the United Nations agency, UN-Habitat who was looking for partners for its pilot project, to break the poverty cycle by providing small housing loans to the urban poor such as slum dwellers in Nepal and five other countries. The landmark US$5 million Experimental Reimbursable Seeding Operations and other innovative mechanism (UN-ERSO) project provides loans of up to US$500,000. The Save and Build model with its incremental approach is seen as a way forward."
source: click here to read

Possible - Market Base Solution:

Can affordable housing developers with collaboration of the organizations like Habitat for Humanity provide a market base solution that can be scale-able and self sustainable ?

Should affordable housing loan by the commercial Banks considered "deprived sector loan" ?
Can the poor and slum dwellers in Kathmandu afford to buy a house ?

Looks like this business model is working for the poor in Mumbai

Monitor India - A Model that could be replicated...Watch the video .....

THE LOW-INCOME HOUSING MARKET in urban India -click here to read the report

Clumsy Success is better than elegant failure

2012-01-09T10:45:00.000-08:00

Mr. Dipak Gyawali talks about collaborative and ground level solution, water politics and many more interesting issues regarding development ......

The bigger idea/concept what Mr.Gyawali is talking about reminds me of the "Shared Value Concept" of Dr. Porter from Harvard.......

Mr. Bill Drayton, CEO of Ashoka also talks about it .... he calls it " Hybrid Value Chains"

"For-profit organizations today have an opportunity to collaborate with citizen-sector organizations (CSOs) on large-scale problems that neither group has been able to solve on its own. The power of such partnerships lies in the complementary strengths of the participants: Businesses offer scale, expertise in manufacturing and operations, and financing. Social entrepreneurs and organizations contribute lower costs, strong social networks, and deep insights into customers and communities.

But to work together effectively, they must focus on creating real economic as well as social value. We believe they can do so by forming what we call hybrid value chains (HVCs), which capitalize on those complementary strengths to increase benefits and lower costs." (Source:HBR,Click here to read more

Just a FYI: I don't think Mr. Dipak Gyawali & I are related .......but again, will have to ask my grand-mom

Should Nepal Ambulance Service (NAS) adopt India's dail 1298 model

2012-01-08T22:17:00.000-08:00

Ambulance demand in Kathmandu- " According to a study by Patan Hospital, of patients arriving at emergency rooms, only 10% arrive by ambulance. 54% arrive by taxi. only 10% of them arrive by ambulance."

Social and economic consequences - "Recent estimates from the Nepal Community Emergency Preparedness Group concluded that Nepal loses about 530,000 Disability Adjusted Life Years (DALYs) per year to injury. By projecting current trends, injuries are estimated to become the 3rd most common cause of DALY loss in Nepal by 2020, as compared to the 9th most common cause currently."

Source: NAS Website , Picture Source: Nepali Times

What is Nepal Ambulance Service (NAS) ?

"NAS is an independent non-profit initiative which offers ambulances equipped with specialised life-saving equipment and trained emergency medical technicians in Kathmandu and Patan. NAS's dispatch center provides emergency pre-arrival instructions and there are 14 on-call emergency physicians for medical consultations." source: Click here to read ( Nepali times)

Objective of Nepal Ambulance Service - Click here to watch the video (must watch video to understand the objective of NAS)

NAS - Current Financing and Revenue Source :

Donations from Nepali industrialist and other businessmen to buy Ambulances
Revenue Source : "The service will charge Rs. 20 Per - Kilometer (one way only) as per the Nepal Government Rules." (Source: NAS WebSite)
The Website also mentions- " In order to make the services of NAS available to everyone, including those who do not have the means to pay, NAS will seek funding to cover the needy. In my opinion :

NAS should replicate ZHL business model, which has a revenue model that is self sustainable ....... Like ZHL , NAS can possbile attract Impact investment investment s too from ACUMEN FUND.............................
NAS current strategy requires grants/charity to add more ambulances .... I think it will be hard to scale up with this strategy.....

Case Study 1: Business Model explained Columbia Business School
Case Study 2 - Ziqitza Healthcare Limited: Scaling Emergency Medical Services across India ..CLick here to read
Case Study 3 : Acumen Fund: Valuing a Social Venture ( Interesting investment model) click here to read

Things I read today : Jan,08,2012

2012-01-08T00:46:00.000-08:00

A New Approach to Funding Social Enterprises - click here to read more ( must read more aspiring impact investors )
Firms with benefits- click more to read

Nepali Stock market my way....

2012-01-05T18:51:00.000-08:00

So the finance ministry yesterday introduced few measures to reinvigorate the anemic stock market ( lowest level in six years ) .

One of the move was - The Government has decided to increase the public awareness about benefits of investing in capital markets in semi urban and other areas in the country, with the hope that investments from non- Kathmaduites will increase liquidity in the market and help the NEPSE to reverse its perpetual trend ..... Looking from a distance, it looks like a very encouraging initiative taken by the government. After all each and every citizen of the country ( rich or poor) should get an opportunity to investment his savings in the stock market ,with a hope that the invested money will generate higher returns in the future..... In the Democratic republic of Nepal an individual should also be free to gauge his own risk appetite and make his own investments decision .....................One can also argue this measure as a "inclusion " policy introduced by the government. Inclusion as in, an attempt to bring in " non-kathmandu" population to participate in the equity market ......................

Having said all this,in my opinion, If the " business as usual" continues in the NEPSE, saving and investments of thousand of many more will be at risk........ I don't know if it makes much sense but in my opnion government need to do few things to revive the stock market and increase confidence .............

Diversity : NEPSE is too " sector" specific , majority of the companies listed are financial institutions .......... Beta of the NEPSE and the financial sector is highly correlated.....there is little or no ground for diversification ... I always wonder why big industrial houses are not interested in IPOs? ..............If it was my way - if a company market value is more then a "certain" amount, then they should be forced to float there shares....... This will not only help " common" Nepali to enjoy the financial gain , but will also increase transparency and accountability of the companies........ it can possible means " less" tax evasion by these big industrial houses .....
Par Value : According to my knowledge ( you might have to double check) , when a company decides to float its shares, the Initial public offering price per unit of the share is always Rs 100.... In my opinion, instead of having a uniform par value for all the companies, the par value should be decided according to the valuation of the firm and its reputation ...... It does not make sense to me when the "par" value/ initial price of a "blue chip" stock is also Rs 100 and the price of a "not so healthy" company is also the same......
Increase and Improve Governance in the Board rooms ---- Less of "seth jee" attitude when running the board meeting and demand for accountability from the directors voted by shareholders ?? ...... As of now, these directors are suffering from "neta" virus ,they only remember the shareholders when they need " proxy" vote for next board election ... If I had my way, I would have banned the practice of paying board members for attending board meetings.......... may be there incentives should be pegged to stock performance .........
Introducing private equity and venture capital culture :Concern authorities should encourage structuring of venture fund - which will translate into spurring of entrepreneurial ventures and possibility in the long term increase in the number of diverse companies in the stock exchange ...

CATCH 22 : Youth self-employment fund faces two-pronged problem

2012-01-04T21:21:00.000-08:00

" The government´s ongoing project, under which jobless youths are receiving unsecured credit, has faced a major roadblock after several banks and financial institutions said they cannot afford to continue giving away collateral-free loans, arguing that it could generate holes in their balance sheets." Click here to read more

Should a private public partnership be initiated to inject equity in these small enterprises or should the Government lift the lend rate cap ?

Kathmandu's population - 4 million ... total number of public toilets 32

2011-12-30T18:36:00.001-08:00

Lets privatize the public toilets...........................................

What sucks?

Nepal Investment Board should bring in investments in social enterprises

2011-12-30T15:32:00.000-08:00

Kudos to Mr. Radesh Pant for accepting the career denting challenge of heading the Nepal Investment Board (NIB). I hope under his leadership,NIB will lure in lots of much needed FDI in the country. Mr Pant knows it well that he is going to face significant domestic challenges like militant labour, extortion, local opposition, arbitrary government policies, red tape, corruption, power cuts, bandas etc . I am confident that he and his team is competent enough to acclimatize/ face these never ending domestic challenges .In my opinion, in the coming year,the bigger concern for NIB will be the uncertainly in the global macro economic situation..........................

"According to a 2010 Central Bureau of Statistics survey, there were 1,897 firms operating with foreign investment from 139 countries. India had the largest investment in Nepal with 393 companies, followed by China with 179, Japan 132, South Korea 94, UK 94, Germany 61 and Switzerland 27." click here to read more

NIB is banking heavily on India to investment in sectors like infrastructure and energy, however I believe in 2012, it is unlikely that Indian private sector will expand its balance sheets to own assets in Nepal......According to a study - "Credit Suisse looked at loans to 3,550 non-financial services companies in India with aggregate borrowing of $385 billion at the end of March and found that nearly 30% had net debt more than six times current earnings before interest, taxes, depreciation and amortization. That's increased by about 50% in the past five years." click here to read mo

Uncertainly in the foreign exchange rate (18% fall in the rupee against the dollar since April ,2010) and growing concern of sovereign debt crisis in Europe will likely retard FDI outflow from European Countries.........................................Chances are also high that major European Countries will experience recession in 2012...

Considering the global macro economic situation, In 2012, Nepal Investment Broad needs to attract low capital intensive FDI and Impact Investing in social business and enterprises ...... NIB should work to bring in FDI/Impact investing in sector like health Care, micro finance agriculture, small scale clean tech,water and Sanitation ... ............. Bringing in FDI in social enterprises will not only help flight poverty and other environmental concern but will also help build a bigger and stronger "traditional" FDI suitable eco-system in Nepal ...........

NIB should help potential foreign private equity/social venture fund investors to conduct investment due diligence, support deal flow and provide investment safely .....Typically , impact investors are much more risk takers then "traditional" foreign investors, I think it will be less laborious to attract foreign impact investors despite investment risk from domestic variables.....

Collaborators or competitors for the Nepali Commercial Banks

2011-12-23T16:21:00.000-08:00

Marred by the fiscal austerity and debt deflating initiatives western countries are pivoting their "foreign aid" distributing mechanism. According to a recent article published in the Financial Times , UK will try Sovereign Wealth Fund model to distribute aid in India. Which basically means the United Kingdom's Government will start investing rather then giving "grants" and other kind of free/subsided money to resolve pressing social and environmental challenges in the developing countries.These investments are expected to make financial returns to the UK taxpayers. If this model is successful in India UK government has plans to replicate this investment,rather then aid model to other foreign aid recipient country ......

USAID has also started a similar kind of "impact investing"model.....one of the many initiatives of USAID is its recent partnership with -JPMorgan Chase & Co., the Rockefeller Foundation, Bill & Melinda Gates Foundation and the Gatsby Charitable Foundation to invest $25 million worth of commercial capital in agriculture-related small and medium-sized enterprises in sub-Saharan Africa.

Nepal in the future might see a similar investment policy from USAID & DFID....... SO what does that mean to the Nepali Private sector, Development Agencies ,NGO and commercial banks ?

My questions :

Less Anti-Aid sentiments,since investments will fall under FDI not foreign AID ?
Investments from USAID and DFID in private sector also means contribution for the entrepreneurial culture and venture capital eco-system in the country ? If these organization are providing equity capital,that means, the entrepreneurial will have more guidance and flexibility to take more risk ?
Entrepreneurs will be more willing to take equity investments /debt from these organizations , does that that means increasing competition for the commercial banks ? Cost of capital for these organization will be cheaper then that for the commercial banks.....
How will these organizations investment there risk capital ? existing channels like " NGOs" are incompetent to do investment due diligence and support operation of the ventures ....

Youth Self-Employment Programme- A classical case of financial inclusion failure......

2011-12-16T08:21:00.000-08:00

Since the inception of the Youth Self-Employment Programme,"consultants" have charged development organizations thousands of dollars to conduct diagnosis and give a third party accreditation to the program. The glossy annual reports of various development organizations proudly claims that -Youth Self-Employment Programme is the solution to ignite entrepreneurial cultural and generate self employed jobs for the youths in the country.

Despite of the lofty claims,the "real" performance of the program has been extremely unsatisfactory - " Although the government targeted to employ 50,000 individuals through the Youth Self-Employment Programme (YSEP) this fiscal year, the progress so far has been disappointing, with just 1,842 employed. " ( Kathmandu Post, Dec 20)

SO what Sucks? What is not working ?

" The fund has so far provided bulk loans worth Rs 330 million through 28 Banking and Financial Institutions and cooperatives out of its total approval of Rs 1.75 billion. With lent amount, it was expected that a total of 22,827 individuals would be employed." click here to read more

Bank are reluctant to lend because of the following reasons -

Lack of proper government enforcement
High transaction and due diligence cost
High Risk ( political pressure to write off the loan )

What is Impact Investing?

2011-12-01T21:41:00.000-08:00

Need to showoff a little bit..Was lucky enough to interact with JED EMERSON..Thanks to Professor PAUL HUDNUT...

Impact investment in ASIA .... And again Nepal is not even mentioned,WTF?

2011-12-01T21:15:00.000-08:00

I personally feel bit frustrated when Nepal is not mentioned or considered as a potential market for Impact Investing activities in glossy impact investing reports .....................For CRYING out load, Nepal is if not the poorest, one of the poorest countries in ASIA........ Our people also have strong entrepreneurial spirit and YES we also believe that it is entrepreneurship and investments not AID that leads to Economic Development ............

Asian Development Bank came out with a report called "Impact Investors in Asia

Characteristics and Preferences for Investing in Social Enterprises in Asia and the Pacific"

Yes What Nepal is not even mentioned ............................................... Some time it makes me wonder if impact investment is also about " Trophy Investments" and they don't want to take risk ??

Need For micro insurance products in Nepal

2011-12-01T20:38:00.000-08:00

Recently read a news about how .... "1,300 chickens and 200 ducks at Manohara Landless Squatters´ Settlement have been destroyed on the suspicion of bird flu."....These birds were destroyed as per the government decision............ Kudos to rarely experienced proactive effort of the Government of Nepal to tame this dangerous endemic .........In my impact investing mode ,reading this article few questions and thought came crossed my mind..

1,300 chickens and 200 ducks had a lot of financial value. What are the implication of destroying the 1500 birds ? These birds might have been the financial asset of many low income people ...
Did the Government announced any compensation package to those who suffered the financial loss ?
Nepal Insurance Board need to put there act together and promote micro insurance among the low income people. Micro insurance coverage for livestock (is chicken considered livestock) can help low income people to hedge there risk
Like how Nepal Rastra Bank has made it mandatory for large scale financial insinuations to lend certain percentage of their loan portfolio to "deprived sector",may Nepal Insurance Board need to adapt similar kind of policy and force Insurance companies to sell micro insurance product for vulnerable communities ?
I want some haas ko choyela :)

Micro-Insurance:

The insurance sector in Nepal is governed by the Insurance Act, 1993 under the supervision of Nepal insurance board (IB). Over all insurance sector in the country is not well develop, there is a lack of awareness about insurance among the general population and the existing companies have some little interest to penetrate the semi-urban and rural areas.

To promote micro insurance sector in the country, micro insurance bill 2010 was proposed by the Nepal Insurance Board. In 2011, the Finance Ministry of Nepal directed the Nepal Insurance Board to identify 10 rural districts where first phase micro insurance program can be implemented. According to the Nepal Insurance Board, micro insurance will cover health and assets like crops, livestock, rickshaws and tea shops. Currently, the IB has identified six micro insurance products which will provide coverage of up to Rs 100,000[1].

In the near future, the Nepal Insurance Board also plans to issue a directive that will oblige all the Non Governmental Organization, community groups and microfinance companies to work as agents of government-authorized insurance companies. Currently, some of the microfinance companies are selling micro-insurance products without taking the permission of the Nepal Insurance Board

[1] http://www.myrepublica.com/portal/index.php?action=news_details&news_id=38414

Farm gate price of chicken is about Rs 145 per kg.

Will RMDC's public offering open doors for retail impact investing in Nepal... International impact investors should buy RMDC stocks

2011-11-25T11:28:00.001-08:00

In a blog post, Anthony Bugg-Levine and Jed Emerson,the authors of Impact Investing: Transforming How We Make Money While Making a Difference were quoted - " the sector (Impact investing ) has so far existed almost exclusively in the realms of "the ridiculously rich and the ludicrously large." Family offices, private clients, and pension funds are the ones with the large capital to put to work, perhaps more than the impact sector can even handle for a very long time.

So what about retail? While opening up the doorway to retail clients may not hold as much sway in terms of volume of investment capital, taking impact investing retail is important for more than sheer capital reasons.

As Bugg-Levine and Emerson say, "it is about creating a more integrated relationship between our assets and our values," and it's about transforming what society values and how we organize our resources to achieve these values. If impact investing remains confined to the upper echelons of society, then opportunities for transformation at other levels are limited. What we need are less boutique, innovative deals, and more products that can be accessed by a wider range of people. And with the recent Occupy Wall Street protests making it clear that our society is in desperate need to rebuild trust in our economy, it's very important that we as a sector do our part to aim for inclusivity.

I thought this blog post relates to the recent development that took place in the Impact investment space Nepal ....

"Rural Microfinance Development Center (RMDC), wholesale lender for microfinance institutions, will soon float its shares to the public, becoming first such company in the country to launch an initial public offering (IPO). As of now, the company has plans of releasing 1.56 million units of shares, with each stock priced at Rs 100."
"The company, which provides wholesale credit to more than 90 microfinance institutions, is currently backed by more than a dozen institutional investors including Nepal Rastra Bank, 13 commercial banks, five regional rural development banks, the Deposit and Credit Guarantee Corporation and Nirdhan Utthan Bank."
"The company, with a capital of Rs 320 million, provided credit of Rs 5.81 billion to 88 microfinance institutions located in 67 districts till last fiscal year ending mid-July, according to information posted on the company´s website. This amount has benefited 1.2 million poor and deprived families. So far, 100 percent of the loans issued by the company have been repaid, meaning the company has no non-performing loans."Source:
The International Finance Corporation (IFC) entered into a pact with Rural Microfinance Development Centre (RMDC) to purchase US$700,000 worth of shares of the latter.IFC has agreed to buy each share at a premium of Rs 180 over the face value of Rs 100. Once the shares are purchased, IFC, a member of the World Bank Group, will own 8.25 percent stake in the company, according to RMDC. SOurce

Clean Engine Motorcycle Taxi in Kathmandu?

2011-11-15T18:07:00.001-08:00

DO you guys think this model will work in Kathmandu

If I had some money, I would have started a clean engine motorcycle taxi service in Kathmandu, Nepal. This venture will help create jobs, reduce carbon emissions and traffic congestion in the city of Kathmandu. The startup will have three revenue streams -taxi fares, advertisement on the motorcycles and drivers selling mobile phone prepaid airtime minutes. We will divide our target customers into two segments. First, responsible and frugal tourists who are looking for eco friendly, low-cost and safe mode of transportation for site seeing. Tour guide and basic foreign language training will be provided to our motorcycle drivers. Second target segment will be middleclass Nepalese. It might be possible due to social and cultural norms females wouldn’t be comfortable riding with a male motorcycle driver, to deal with this issue; we will hire female drivers. Our taxis will cater door to door service and will be centrally guided by a call center.

Interesting FDI facts ..

2011-10-26T08:55:00.001-07:00

just wanted to share these two facts,which I thought was interesting ...............................

responsAbility Social Investments AG,one of the world's leading asset managers for social investments that specializes in sectors such as microfinance, SME financing, fair trade and independent media, has invested in Nepal ........ responsAbility has invested in Media Development Loan Fund (MDLF). MDLF gives independent media loan and equity support to media organization in countries where freedom of press is weak. In 2010 ,MDLF provided new funding for two media companies in Nepal − the Jagadamba Press newspaper and the Communication Corner radio broadcaster ..........click here to read more
CDC Group plc (‘CDC’), the UK’s development finance institution (DFI), announced a new US$50 million investment in the first-ever equity investment fund to focus on the very poorest parts of India. CDC is an anchor investor in the Pragati Venture and Incubator Fund (‘Pragati’) and has played a significant role in getting the fund started.CDC.In 2011 CDC announced a high-level new business plan, with a geographic remit focused on low income and lower-middle income countries in sub-Saharan Africa and South Asia. As well as acting as a fund-of-funds investor CDC will now also provide debt and direct investment to businesses in these regions. Click here to read more Can Nepal expect more foreign direct investment from these impact investors ??

insuring the poor in Nepal .....

2011-10-23T22:21:00.000-07:00

Lloyds’ Insurance in Developing Countries Report estimates the number of people who are underserved by insurance to be between 1.5 - 3 billion people ...........

.source:Leapfrog

In context of Nepal :

The Insurance Board of Nepal has called upon all insurance companies in the country to expedite the process of issuing microinsurance policies so that low-income groups could cover life, health and sources of livelihood such as cattle or shops.Click here to read more

Good Market Opportunity ??

Prime MinisterOF Nepal in India ....... begging thy neighbor ??

2011-10-19T20:45:00.000-07:00

India is thinking about setting up its own aid agency. Why should others give aid to India? click here to read more
Cabinet okays BIPA, DTAA signin .Gives go-ahead to the $250m line of credit deal.....click here to read more

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Walking the talk....

2011-10-18T18:07:00.000-07:00

These days we hear a lot about interest in investing in the hydro power sector.... In past couple of weeks, we have heard NRNs and trade delegation from UK showing their utmost interest ... This enthusiasm from the investment community is quiet encouraging...................................Ignoring all these good news,Gyanendra Lal Pradhan, chairman of the Hydropower Development Committee at Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today has formally asked the Government to "Bailout" 28 hydro power companies.......He has blamed the following reasons for the sorry state of these 28 hydro projects ...

increasing cost of construction materials and increased interest rate are the major factors making hydropower projects costlier.

Over the last two years, the interest rate has increased by 5-7 percent points.Gyanendra Lal Pradhan, said other projects except Khimti, Bhotekoshi, Chilime and Butwal Power Company are in trouble. “The projects that started construction at an interest rate of 8 percent now have to pay as high as 16 percent interest .click here to read more

here is my take on this issues... I am not a hydro expert but I am still going to share what I think...

Why should the government bailout these private players?? Ok, I understand that "load shedding” is holding back our nation economic development and these private energy producers are working towards solving this national crisis,but, we need to remember that they will not be distributing free energy to Nepali jantas , we still have to buy it .... What about the moral hazard involve in bailing them out?? ? ( remember some of them have made lots of money in hydro power project license arbitrage and Initial public offering ) .......... my suggestion: Government should not give them free money,soft loans,tax incentives etc ... if private players want public money, Government owned Nepal Hydropower Company will have a equity stake in the projects, and will eventually exit through secondary market offerings .
Another thought…. Will it be possible for interested foreign investors and NRN to inject risk capital in these troubled projects through debt , convertibles or equity investments????......... Investing in these half or almost completed projects is less risky and less capital intensive ?? ... Good opportunity for interested investors ??? (Lets walk the talk NRNs and foreign investors)
or.....International Finance Corporation, commercial lending arm of the World Bank group, last month declared to invest in an average 25 million dollar per annum in Nepal ... opportunity for them ?

Taak-Tuuk-----Nepali frugal innovation

2011-10-15T07:19:00.000-07:00

Interesting article on grass-root level innovation in Kathmandu..............

Ability to overcome scarcity by improvising products and process’ to solve customers’ problem defines the entrepreneurial spirit that lies within us Nepali jantas.Financial and material constraint of many has allowed these micro entrepreneurs/frugal engineers to create more services and products at less cost for more people . Multinationals and Universities are spending billions of research and innovation in “sustainability practices” maybe from their labs in the streets of Kathmandu, our frugal engineers can teach them thing or two on constraint base innovation................

ENERGY for all ..Investing in Nepali energy sector...

2011-10-13T14:05:00.000-07:00

A recent report released by International Energy Agency (IEA) has some interesting facts and figures on investments and strategies required from various government agencies,multilateral institutions and private investors to reduce energy poverty. Here are some highlights from the report, that I thought was relevant to Nepal's energy crisis.

To provide universal modern energy access by 2030, annual average investment need to average $48 million per year,more than five times the level of investment in 2009
According to the report , access to electricity involves more than a first supply connection to house hold.The report claims, access to energy means - a rural household should consume a minimum of 250 KW/hr of energy per year and for urban household it is 500 KW/hr per year .
Nepal's rural electrification program- National 3 -year Interim plan has been cited as one of the vital programs by government to improve access to electricity
ACcess to clean cooking facilities section - Currently, after China, India,Nepal and Vietnam are the next biggest market for bio gas plan.
Th global technical potential for hydro power generation is estimated at 145000 TWH ,more than four times current production,and host of the undeveloped potential are in Africa and in Asia,where 92% and 80% if reserves respectively untapped .
The main obstacle to obtaining greater private sector financing, apart from uncertain investment and regulatory environments and political risks in many developing countries, is the lack of a strong business case for tackling the worst cases of energy deprivation, because of the inability of users to pay. This issue needs to be squarely faced through some form of public sector support, if there is to be a break through to universal access to modern energy. In addition, local financial institutions and microfinance institutions find it difficult to be sufficiently expert regarding new technologies and may underestimate the potential credit‐worthiness of poor households, based on the large amount they already pay for more traditional sources of energy.
Understanding households’ existing energy expenditures is one important step towards unlocking end‐user finance: poor people often are able to afford the full price of modern energy because it costs less than the traditional forms it replaces, such as kerosene lamps and dry cell batteries, but may be unable to overcome the important hurdle of the initial capital cost.
International commercial banks have an established record of financing projects in the energy sector in emerging markets, predominantly in power generation. Pricing finance at market rates according to perceived risk, they offer debt financing, mezzanine finance and, in some cases, equity. They can lend to project developers directly or to a special purpose vehicle set up to conduct the project. Commercial bank financing terms can be less onerous if certain risks are covered by guarantees from a multilateral development bank or the host government.
Private sector financing sources for energy access investments include international banks, local banks and microfinance institutions, as well as international and domestic project developers, concessionaires and contractors. Private finance may also come from specialist risk capital providers, such as venture capital funds, private equity funds and pension funds. The main forms of instruments favored by private sources include equity, debt and mezzanine finance an increasingly important instrument, offered through local banks, is the extension of credit to end‐users, often with guarantees arranged in partnership with multilateral development bank...(Source:IEA,2011)

Some 57 percent households in Nepal do not have an access to toilet

2011-10-07T18:56:00.000-07:00

According to Ramdeep Saha, the Chief of Department of Environmental Sanitation and Natural Disaster Management, only 43 percent families in Nepal have toilets.

Considering this, the government has recently unveiled a master plan on sanitation with a view to providing the people with the basic sanitation facility (toilets) by 2017.

It may be noted that the government in coordination with other organisations has been operating sanitation programmes in two districts, 232 VDCs, four municipalities, one sub-metropolis and many Click to read more

Inspiration ??

2011-09-06T21:11:00.000-07:00

Saw this UBS advertisement in the Wall Street Journal ..........One of the biggest bank in the world wants tenacity of a Sherpa ........................................................

garbage disposal in Kathmandu .....Can Khate enterprise be a solution

2011-09-06T20:24:00.000-07:00

What Sucks ?

Kathmandu Metropolitan city has 31 tippers, four loaders and two excavators to collect and dispose of garbage. Of these, 15 tippers, three loaders, two dozers, three loaders and one excavator are not functional. Shortage of vehicles and equipment, coupled with bad roads to the dumping site, has added to the problem in collecting and disposing of the garbage. click here to read more
People living around landfill sites have been stopping garbage trucks for any number of reasons, even trivial ones. click here to read more
Nearly 400 metric tonne garbage is generated in the Capital daily and it takes two weeks to properly manage garbage.click here to read more

Possible solution ?

Affordable Ambulance

2011-09-06T18:21:00.000-07:00

What Sucks ?

Ambulances operated by various cooperatives and social organizations in the capital are charging excessive fares.

“As per the rules, an ambulance can charge only Rs 20 per kilometer from patients,” Indira Pandey, focal person of the committee, said adding, “But ambulances are charging patients as much as they can.”

Click here to read more

Solution ???

To learn about the pricing strategy of dial1298,start watching the clip from 3 minutes....... interesting revenue stream ,however, I not sure how they deal with the "free rider problem" ??

What is a business model ?

2011-09-02T07:46:00.000-07:00

Tata nano - not serving the Nepali bottom of the pyramid market ...

2011-09-01T19:03:00.000-07:00

Tata nano's price in Nepal is 5 X compared to the price in India . GNI per capita in India is $1220 compared to GNI per capitaof $440 in Nepal ... Tata should stop calling nano a" people's car "

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Time Magazine 2007

Tata hopes the Nano will help millions of poor people around the world — the "Bottom of the Pyramid" in developing world marketing-speak —switch from two wheels to four.

A lot is riding on the the world's cheapest car. In the words of Ratan Tata, chairman of the company behind the upstart econobox, India's "People's Car" will be a "safe, affordable, all weather vehicle for a family which is today traveling on a two wheeler." The entry level model is ticketed at just over $2,500 — or the equivalent of 100,000 rupees or one Lakh — a revolutionary price where the average lower middle class income is $200 a month.

Read more: http://www.time.com/time/magazine/article/0,9171,1702264,00.html#ixzz1Wl4DR2B9

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Car Advice December 2010

Tata sales in India are steady, with the company reporting a monthly increase of one percent. The company sold just 509 examples of its Tata Nano however, down from October’s 3065 units.It may be the world’s cheapest car but it has had its fair share of problems since its debut in 2008. More recently it has been involved in a number of fire incidents. Reports of the vehicle catching fire were made which forced India’s largest private company to retrofit safety devices to them. click here to read more

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Times of India, June 2011

Almost three years after Tata Motors launched their "People's Car" in India, the Tata Nano, the cheapest car in the world, reached Nepal, one of Asia's poorest countries.

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Economic times,June 2011

Tata Nano sale starts in Nepal at an introductory price of (Indian) Rs 5 lakh

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MSN,2011

"While in Mumbai, the Nano Standard costs about (Indian) Rs.1.51 lakh, in Nepal, the price escalation is due to a whopping 240 percent taxes. These include 76 percent customs duty, 60 percent excise duty, 13 percent value addition tax, 5 percent road tax as well as an annual NRS 16,500 road tax."

Social impact diaspora bonds can be a innovative financial product to put remittances to good use..

2011-09-01T18:26:00.000-07:00

How does it work ?

"In 2010, an organisation called Social Finance raised £5 million (about $8 million) by issuing bonds to investors. It handed over the money to the St Giles Trust, which counsels offenders while they are in jail and helps them find work when they get out, reducing recidivism by as much as 40 per cent. The trust will put the money to work at the Peterborough prison in Cambridgeshire. If it fails, investors get nothing. If it cuts recidivism by 7.5 per cent, investors start to see returns. And if it does better, the United Kingdom’s justice ministry will pay more, up to a maximum of 13 per cent.

This could be the next big thing in impact investing. Social impact bonds can tackle problems that governments find hard to solve, because elected officials find it harder to fund prevention than cure. David Robinson, a member of the Prime Minister’s Council on Social Action in the United Kingdom puts it thus: “It is difficult to get rid of the ambulance at the bottom of the cliffin favour of a fence at the top.” With social impact bonds, taxpayers pay nothing if society does not benefit.

Read more: http://www.business.in.com/article/isb/impact-investing-harbinger-of-a-brighter-future-and-a-friendlier-bond-market/27862/0#ixzz1WkqjA9r0

Venture Fund regulation in Nepal ?

2011-08-18T18:53:00.000-07:00

I don't know if Securities Board of Nepal has hammer out any law/ regulation for alternative investments,which includes venture funds,private equity , hedge fund etc..... If and when they plan to do so ,I believe the regulation will look a lot like this ..... click here to read ....

It is not finance,stupid!

2011-08-17T11:07:00.000-07:00

This summer after competing my curriculum practicum in Sri Lanka.I went home (Kathmandu,Nepal) for a month...I had plans to conduct a situation analysis on -possibilities of Impact Investment in Nepal ....In this process, I met with various bankers, entrepreneurs and many wanna be impact investors like yours truly.Thing I found very interesting is that securing capital is not the only objective or might not be the purpose of the social enterprise,when asking external guidance to run their business efficiently. Most of the people I met were wanting help on the operational side of the business.For example: Market linkage, book keeping , supply chain and inventory management,etc...

my experiences in Nepal contradicts the rhetoric that " lack of access to finance" in the biggest constraint for SMEs to scale up......Apparently, SME entrepreneurs are putting "Dead capital" to work ....

Nepali social venture fund

2011-07-28T20:57:00.000-07:00

In an effort to increase the access to finance to the rural enterprises and un banked population , the Central Bank has asked the commercial banks to earmark 3.5 % of their total loan polio to the deprived sector .Despite Central Bank’s pro financial inclusion polices and enormous opportunities in the uncharted areas ,commercial banks are reluctant to lend to the deprived sector .High per unit loan transaction expenses and risk of default are the main attributes that will make commercial banks reluctant to lend more than the obligatory 3.5% of their total loan polio. Considering , commercial banks cut throat competition and their constant battle to minimize loan loss provision and maximize the net income ,form the perspective of the commercial banks reluctantly can be rationalized .In order, to encourage the commercial banks to lend to the deprived sector ,Nepal Rastra Bank has to come out with a efficient strategies that will improve efficiency and inclusion of the poor in the deprived sector. One of the strategies could be encouraging equity investment rather than debt investment to the deprived sector. Under this strategy, commercial banks will buy tradable “deprived sector lending securities” from the NRB regulated, Microfinance institutions, and these tradable securities will fulfill the deprived sector lending obligation of the commercial banks. If implemented this scheme will allow commercial banks to (sell/trade ) these deprived sectors lending security to varieties of socially responsible investors including impact investors and international agencies, those who advocate for financial inclusion and access to finance to the poor. This financial product could also be useful to tap a particular segment of NRN investors, whose motive to invest in Nepal is more “social and emotional”, rather than to solely gain financial return

Non-Fundable Zones

2011-05-24T06:47:00.000-07:00

Skeele's enterprise brings job prosperity to families in Nepal by selling fibers from plants grown in the Himalayas to international markets - however, finding funding to scale her operations has been a challenge. The enterprise, she finds, does not fit neatly into the usual healthcare, water, agriculture, housing or hunger sectors. Since most social venture firms do not accept unsolicited proposals, this adds further stress to a stressful search...Click here to read more

SME in Nepal

2011-04-07T17:59:00.000-07:00

"तथ्यांकअनुसार सुरुदेखि ०६५/०६६ को अन्त्यसम्म १ लाख १८ हजार ९ सय २२ उद्योग खारेज भएका छन् भने ५३ करोड ५१ लाख रुपैयाँ लगानी खेर गएको छ । यो अवधिमा ९ लाख ९८ हजार ९ सय ३० व्यक्तिको रोजगारी गुमेको महासंघको औद्योगिक प्रवद्र्धन तथ्यांकमा उल्लेख छ ।"

तथ्यांकअनुसार हालसम्म मुलुकभर सञ्चालनमा रहेका घरेलु तथा साना उद्योगमा मात्रै १ खर्ब ७ अर्ब ५ करोड लगानी छ । यसबाट १ लाख १० हजार ७ सय ६१ उद्योग सञ्चालनमा छन् भने तिनमा ९ लाख १५ हजार ५ सय ३९ जनाले रोजगारी पाएका छन् ।..............

Click here to read more

branchless banking Nepal

2011-04-06T07:30:00.000-07:00

"The interaction was held by the ministry in association with National Banking Training Institute with an objective of enhancing people’s access to financial service. “Our objective is to enhance common people’s excess to financial services via branchless banking,” said NBTI CEO Sanjib Subba. “Participants discussed creating a common network platform for conducting branchless banking. As it requires a huge investment in technology, the participants focused on finding a way for moving ahead together.”Click here to Read more

Energy Economics Nepal....

2011-04-04T18:22:00.000-07:00

we have currently installed the power of around 700 MW only. We have huge hydropower resource of 43,000 MW but have been successful in harnessing only 1.5 percent of its potential. Besides, we do not have any known resources of petroleum products, but the consumption of these products has been increasing at a tremendous rate. In 2010, total petroleum products sales (1.2 million) increased by 27 percent but some of the products increased at a much higher rate such as petrol by 31 percent, diesel by 37 percent and LPG by 22 percent respectively. The consumption of the petroleum products is much higher in comparison with the GDP growth rate of around 3.5 percent . As per the Economic Survey of the country, import of petroleum products was just 27 percent of the commodity exports in 2001.

Now in 2011, it may surpass 110 percent (around Rs 70 billion) of the commodity exports (Rs 64 billion approximately). Because of the power cuts and other reasons such as strikes and labor problems, our industrial outputs are getting less competitive and hence, exports are stagnating at the range of around Rs 60 billion. Click here to read more

Sorry state of rural electrification in Nepal

2011-04-01T09:09:00.000-07:00

Problem :

"Under the community-led model, user groups partnered with the government to being electricity to villages that were off the grid. Communities took charge of distribution, maintenance, and even shared 20 per cent of construction costs, with government providing the rest. These community-managed systems are so well administered that pilferage is non-existent and most are making decent profits. This is in stark contrast to the badly managed and nearly insolvent NEA. Following electrification under this model, schools have introduced computers, health posts have started refrigerating vaccines, and small-scale industries are being set up."

"Faced with crippling power cuts in the capital, it is easy to forget about the 55 per cent of rural Nepal that isn't connected to the grid. But community electrification is one of Nepal's few success stories, and high-level visits from Bhutan and Laos indicated international interest in the model. By forcibly incorporating a community-driven program into the centralised and ineffective institution that is NEA, the government is guaranteeing that its success will

be short-lived."

(Source: Nepali Time)

Click here to Continue

Solution :

World Bank recent came out with this report for India - " Analysis of Models for Improving Rural Electricity Services in India through Distributed Generation and Supply of Renewable

Energy Click here to read

Fake medicine Nepal.......

2011-03-28T17:41:00.000-07:00

Problem:

KATHMANDU, March 29: Police apprehended four people for administering fake hepatitis B vaccine to the public in Boudha following the tip-off from the District Public Health Office (DPHO), Kathmandu.

DPHO Chief Bisho Ram Shrestha said the police have handed over the quack vaccinators to Kathmandu District Administration Office for punishment. Claiming such vaccines can have disastrous impact on human health, Shrestha said, "Preventing fake vaccinators from selling unapproved vaccines has become a major challenge for us."

According to DPHO, all vaccines must have quality approval from World Health Organization (WHO) before being administered. Likewise, vaccines must also get approval from the Department of the Drug Administration (DDA). The vaccines administered by the arrested vaccinators had approval from neither of the agencies. Click here to read more

Solution???????????????

Sproxil is combatting the global counterfeit drug market through a MobileProduct Authentication™ (MPA™) solution that enables consumers to verify the authenticity of pharmaceutical products. Sproxil’s MPA solution allows customers to send a free text message containing a code found on a drug to Sproxil’s servers, which immediately respond and indicate whether the drug is genuine or fake. Sproxil has set up Africa’s first national mobile-based anti-counterfeit service in Nigeria, and Acumen Fund’s investment will enable the company to expand into Kenya and India .Click here to read more

Nepal's biggest dairy farm .....

2011-03-27T09:14:00.000-07:00

Domestic production fulfils only half of the total daily requirement of 800,000 liters of milk across the country.

मुलुकमा खपत हुने आधा दूधका लागि भारतमै निर्भर हुनुपर्ने बाध्यता अन्त्य गर्न भन्दै रुपन्देहीमा २५ करोड रुपैयाँ लागतमा पशुपालन तथा दुग्ध उत्पादन फार्म स्थापना गरिएको छ

"लुम्बिनी एग्रो प्रोडक्ट्स एन्ड रिसर्च सेन्टर १० बिघा क्षेत्रफलमा फैलिएको छ । फार्ममा अहिले होलस्टाइन, जर्सीलगायत पाँच प्रजातिका १ सय ७० वटा गाई, १५ वटा भैंसी, तीनवटा साँढे र ६५ वटा बाच्छाबाच्छी छन् । गाई संख्या छिट्टै ५ सय पु¥याउने लक्ष्य रहेको फार्म सञ्चालक शशी पौडेलले जानकारी दिए । “पशुपालनलाई व्यावसायीकरण गरी दूधमा देशलाई आत्मनिर्भर बनाउने उद्देश्यले फार्म सञ्चालन गरेका हौं,” उनले भने ।"

"फार्मले दूध चिस्याउने र दूध दुहुने मेसिन पनि राखेको छ । हाल १ सय दुहुना गाईबाट दैनिक १ हजारदेखि १२ सय लिटर दूध उत्पादन भइरहेको छ । एउटा गाईले बढीमा ४०–४५ लिटर र कम्तीमा १० लिटर दूध दिने पौडेलले बताए । २३ फिट अग्लो आधुनिक गोठसहितको फार्ममा अहिले २५ जनाले प्रत्यक्ष रोजगारी पाएका छन् ।" click here to read more

Bhat Bhateni and Big Mart helping or hurting Nepali Janta ????

2011-03-25T06:33:00.000-07:00

Organized retail stores like ( Bhat Bhateni,Big mart) are sprouting all over the big cities of the country ............ the key drivers being changing consumer profile and demographics, increase in the number of international brands available in the Nepali market, economic implications of urbanization, credit availability, improvement in the infrastructure, increasing investments in technology and real estate building a world class shopping environment for the consumers.

I recently read about Big Mart opening a new store in Kathmandu ...here is the synopsis of the article

Big Mart will contain 11,000 sq ft on three floors and expects to provide employment to 70 to 80 people. According to Prince Khetan, managing director of Mega Mart, the company is investing around Rs 50 million in the project.
Inventory consists of 34,000 kinds of products and counting.
Mega Mart is also planning to open two new outlets at Jawalakhel, Lalitpur and Battisputali, Kathmandu within this year.

After reading this article few questions crossed my mind.....................

1) Out of 34,000 kinds of product in the inventory, how many are domestically produced ? .... So is the raise of organized retail stores helping or hurting Nepal’s current account balance? (Last time before leaving Nepal,I did my thithaura,aachar,bhujiya,chau chau shopping in one of these store....... saw lots of Indians & Expats shopping around..considered export ?)

2) Are these stores supporting local manufactures and farmers by procuring more goods from them??.......

3) Critics of western style "one stop shop " experience claim that its kills local kirana shops .......So are these "hyper shops" destroying existing "Daal Bhaat" winning sources or creating new jobs ?

4) President of The World Bank said in a recent interview "over time, what many economies have found, not only developed economies like the United States, but I have seen this in Mexico, Brazil and China, that some of those large distributors can capture the benefits of their supply chains with better, effective logistics. So I think that would obviously create additional opportunities to benefit the consumer"

5) WalMart ( daddy of all retail chains ) claims "Encouraging modern retail helps arresting the current inflationary trend, directly impacting the consumers at large.".................. Basically,Wal Mart is saying big retail store ( Bhat Bhateni ,big mart types) can achieve economies of scale,dent supply side bottle necks, increase margin of the kisans by weaning off middle men, engaging in both up stream and down stream supply chain.......fancy consultant calls it a " Farm to Fork model".........................................

Are these organized retail store chains in Nepal directly "for real " engaging with local manufactures and farm cooperatives or taking the "wholesale" route ???......Are they even selling fruits, veggies,dairy products , chau chau ( Nepali items) at discount price compare to kirana pasal or "aallu gobi bhantaa" street/cycle vendors ??

Balance Sheet of financial cooperatives are fatter than that of commercial banks

2011-03-24T20:03:00.000-07:00

According to a study, in Nepal amount of total deposits in financial cooperatives have outgrown the total deposits of all the commercial banks...............Does this mean encourage Financial cooperatives for financial inclusion ????

"मुलुकभर रहेका सहकारीहरूमा सम्पूर्ण ३१ वटा वाणिज्य बैंकभन्दा बढी निक्षेप रहेको सहकारी विभागले गरेको एक अध्ययनले देखाएको छ । विभागले माघमा संकलन गरेको विवरणअनुसार सहकारीको कुल निक्षेप बैंकहरूको भन्दा ३० अर्ब रुपैयाँले बढी छ ।

वित्तीय सहकारीले गत माघसम्म ६ खर्ब ५० अर्बभन्दा बढी निक्षेप संकलन गरेको तथ्यांक छ । नेपाल राष्ट्र बैंकको पुससम्मको तथ्यांकअनुसार वाणिज्य बैंकहरूमा ६ खर्ब १९ अर्ब रुपैयाँ निक्षेप छ ।" Click here to read more

This news forced me to revisit an article I read in Harvard business review -

"many innovations that engage the poor have come from players outside the mainstream in their industries. Take the financial sector, for example: Microfinance originated with NGOs, mobile money was developed primarily by telecom companies, and micromortgage companies in India are being launched by entrepreneurs and firms with no experience in the housing-finance sector. Established commercial banks, on the other hand, are usually saddled with legacy systems, fixed assets, regulatory requirements--and, occasionally, mindsets-- that make it difficult for them to lead the innovation charge in financial services for the underserved"

Investment wanted...Invest in Nepal energy sector ...

2011-03-24T18:54:00.000-07:00

The government of Nepal has launched a $275m (£169m) initiative to bring an end to the country's energy crisis within five years.

Despite having massive hydro-power potential, Nepal produces less than half its electricity needs.

The government says that under its plan, Nepal will be free from load-shedding within five years.

It says that it will also

waive custom duties for materials related to produce solar power
make better use of existing thermal plants
waive tax on private investors building new hydroelectric power plants
encourage the private sector to produce power from rubbish

The government also said it would provide special security for investors and introduce laws to make it a crime to hamper energy construction projects, punishable by five years in prison.

Source: http://www.bbc.co.uk/news/world-south-asia-12846672

The economics of Solar power click to read

(Source: Mckinsey & Company)

water water everywhere and not a drop to drink??

2011-03-24T17:28:00.000-07:00

pic source: MIN RATNA BAJRACHARYA

Perhaps two-fifths of the people in Asia’s cities do not have access to piped water. Many of the rest suffer from intermittent supply and unsafe water. And, globally, the provision of water to cities is not keeping pace with urbanisation. In a message for “World Water Day” on March 22nd the United Nations’ secretary-general, Ban Ki-moon, claimed that in the past decade the number of city-dwellers without a water tap in their home or immediate vicinity has risen by 114m.

Mr Ban identified the problem as “a crisis of governance, weak policies and poor management”. Asit Biswas, of the Third World Centre for Water Management, an NGO, agrees: “Lack of money, scarcity, and so on—they’re all excuses. The problem everywhere is bad management. Click here to read More

"The daily drinking water requirement of Kathmandu is 320 million litres but supply hardly amounts to 100 or 110 million litres.Groundwater levels are being depleted by 1.9 metres each year. Marking World Water Day, water expert Nawaraj Shrestha notes that 15 years ago, Kathmandu's groundwater was at the level of 20 to 30 metres below the ground. "But now we need to dig deeper than 80 metres to hit water."

"A 1997 study by Australian researcher Chris Well shows that on current trends, Kathmandu's groundwater supply will dry up in 100 years. " Click here to read more

Digits above makes me wonder, how much private water supply tanker companies should be making??Who says Nepal is not reaping dividend out of its water resources :)..........

Indian foreign policy.....

2011-03-24T09:21:00.001-07:00

Dr. Shashi Tharoor in Lok Sabha on 15th March, 2011 Part 1 from nehha on Vimeo.

He claims Indian parliament is against Maoization of Nepali Army ....

Dead Capital in Nepal ...2011 International Property Rights Index

2011-03-22T21:31:00.000-07:00

"The 2011 International Property Rights Index (IPRI) has ranked Nepal in the 100th place among 129 countries, one slot higher than last year. The IPRI is an annual international comparative study that measures physical and intellectual property rights and their protection around the world.

The study quantifies the strength of property rights, both physical and intellectual, and ranks countries accordingly. The countries are ranked based on 11 factors reflecting the state of legal and political environment (LP), physical property rights (PPR) and intellectual property rights (IPR). This year the report contains rankings of 129 economies representing 97 percent of the world GDP." Source: KP

Click here to Read more

Dead Capital

"A crucial ingredient missing in most macroeconomic programs in LDCs is the establishment of widespread, legal property rights for the assets people now hold. It is not that the majority, the poor included, in countries trying to build market economies is without property. This majority does in fact possess land, buildings, and businesses, but they do not have formal, legally recognized rights to use these assets in the marketplace which macroeconomic reforms are supposed to create.

The reason why open markets have produced enormous wealth in the West and not in developing countries is that the property rights of citizens of Western nations over their assets are "formalized." What does "formalized" mean? Property rights are "formalized" when they are embodied in universally obtainable, standardized instruments of exchange that are registered and governed by legal rules and connected to the rest of the economy through mechanisms which, additionally, can support the whole range of transactions that make a market economy work. Formalization creates the rights, obligations, and legal instruments that enable the owners to relate to government and private business. It provides the mechanisms whereby the most important assets of the informal sector, namely real estate and businesses, can be used to secure the provision of goods and services, especially credit and infrastructure. Formalization transforms its beneficiaries into individually accountable customers.

Formal property rights afford economic agents in the Western nations indisputable proof of ownership and protection from uncertainty and fraud. Property rights of Westerners can then enter the marketplace as a form of specie-backed currency adapted to the rapid and frequent transfer of resources to their highest valued-use. Their markets generate growth because widespread formal property rights permit massive, low-cost exchange, thus fostering specialization and greater productivity.

Without formal property, a modern market economy simply cannot exist because most assets are commercially and financially invisible. Nobody really knows who owns what and where, who is accountable for the performance of obligations, who is responsible for losses and fraud, and what mechanisms are available to enforce payment for services and goods delivered. This is called the informal sector: that part of an economy that lacks the institutions required to provide security and allow business and government to perform efficiently. It is a universe where there is too much room for misunderstanding, confusion, reversal of agreement, and faulty recollection, and where the costs of uncertainty are so high that credit cannot be extended on reasonable terms to most people and businesses.

The majority of informal assets are therefore "dead capital"; they lack value as collateral for securing the interests of creditors. They are like corporations that cannot issue stocks or bonds to obtain new investment and finance. To become "live capital," these assets must first be formalized so that ownership can be traced and validated and exchanges can be governed by a legally recognizable set of rules. Formalized titles were crucial to opening the door to credit in countries such as the United States, where close to US$4 trillion of the securities floated in the market are backed by mortgages and the other guarantees that formal property permits." (Source: MOC)

Click here to read more

Drip water Irrigation Nepal

2011-03-19T17:49:00.000-07:00

"Less than half of Nepal's arable land is irrigated, the rest depends on erratic rains. Lack of investment in irrigation and the shortage of water in the dry season have hindered the spread of irrigation schemes in districts like Bhojpur and the arid areas of western Nepal."

"Madan Gopali invested Rs 25,000 to get the drip system in his field and is waiting for the next harvest to see the results. Says Gopali: "Water is scarce here. With this system I can irrigate the field year round. If I get three yields a year, I will recover my investment in two years." (Source: Nepali times)

Click here to read more

Drip water successful business model - Click here to read

Wind Energy in Nepal

2011-03-19T17:44:00.000-07:00

"According to a study by the Alternative Energy Promotion Centre (AEPC), Nepal has the potential to generate 3,000MW from wind energy, with the Kathmandu Valley alone capable of producing 70MW. On average, Nepal gets 18 hours of wind every day and at least two good windy days a week, and in some places like Kagbeni, 200MW could be generated from a single plant. Along with private firms and development organisations, the government too has shown interest in tapping into this resource."

Click here to read more

Pro enterprise financial reform in Nepal ??

2011-03-15T11:45:00.001-07:00

Bankers have expressed serious concern about the lawmakers’ proposal to amend the proposed Banks and Financial Institution Act (BAFIA), saying that the proposal, if implemented, would lead the banking sector to a disaster.Lawmakers, especially from the UCPN (Maoist), recently made such proposal to the Parliament.

Concern Number one : - Bankers’ opposition starts from amendment proposal that seeks to replace the term ‘economic liberalisation’ by ‘self-reliant mixed economic system’ in the preamble of the proposed BAFIA. “Progress achieved so far in the banking sector is due to the economic liberalisation policy,” bankers said at a press meet on Monday. “Are we heading back towards the old controlled system?” asked Nepal Bankers’ Association Vice President Rajan Singh Bhandari.

My Take: term it economic liberalisation’ or ‘self-reliant mixed economic system,Does it really matter ? No matter what you term your "banking ideology model" in this age of globalization, Nepal has to comply by the global financial rules ( WTO agreement , IMF,BASEL III) .......... Remember the recent " No string attached loan" from IMF ??

Concern Number TWO : Bankers are mainly concerned about some preventive measures and compulsive provisions in the proposal. As per the proposal, banks should lend to projects by putting up the same project as collateral.Bankers said this provision proposed by lawmaker and industrialist Padma Jyoti was impractical in Nepal’s context as it would lead to huge defaults. Currently, banks in Nepal lend against the collateral of other fixed assets.

My take: Little financial innovation can help .... Think about how private equity/ venture funds capital structure works ......Equity investment, quasi equity investment,strong due diligence ..... As of now Nepali regulation does not allow Non banking financial institution,accepting the provision will give Banks first mover advantage in private equity space....This provision will also help cash strapped startup or existing businesses to flourish ......This provision if amended can catalyze innovation and entrepreneurial revolution in the country.....Bankers also need to realize that high risk = high returns ......

Concern Number Three :Lawmaker Sapana Pradhan Malla has proposed that BFIs will have to invest at least 5 percent of their total loans to rural and economically disadvantaged groups. She has also proposed that BFIs should allocate at least 5 percent of their total loan exposure for venture capital to encourage new entrepreneurs. Malla said her proposal is aimed at making banks socially responsible. “D Class financial institutions alone should not be made accountable to reach to the rural poor,” she said.However, Nepal Credit and Commerce Bank CEO Ratna Raj Bajracharya said the government should create a conductive environment for banks to go to the rural people instead of imposing conditions. Bankers also sought a clear policy on venture capital.

My take: Venture capital focusing on rural sector can attract huge foreign direct investment.... Investments that provide capital, expecting financial returns, to businesses (fund managers or companies) designed with theintent to generate positive social and/or environmental impact is called Impact investment....A variety of investor types currently participate in the impact investment field , including development finance institutions, foundations, private wealth managers, commercial banks, pension fund managers,boutique investment funds, companies and community development financeinstitutions. These investors operate across multiple business sectors, including agriculture, water, housing, education, health, energy and financial services."According to the JP Morgan bank over the next 10 years urban affordable housing, rural access to clean water, maternal health, primary education, and micro-finance - serving the population at the "base of the economic pyramid have potential profit opportunity between $183 and $667 billion and a potential investment opportunity between $400 billion and $1 trillion (globally).

Chaudary group and rural farmers ......................

2011-03-14T21:07:00.001-07:00

In Business School when we read or talk about Big Multinational Companies procuring raw material from the Bottom of the pyramid sellers/farmers, we often hear about Pepsi-Contract farming or ITC E-coupal

Here is an example from Nepal..... Chaudary Group,One of the biggest conglomerate in Nepal ( total asset 500 million + ) buys herbs direct from the farmers in rural Nepal ................

"Chaudhary Group, Nepal's one of the largest conglomerates has entered to develop and promote herbal industry through public-private partnership approach in Nepal. Thus, Chaudhary Biosys (Nepal) Pvt. Ltd. (CBNL) was established in 2004 to collectively work with INGO's, Government Agencies and Communities in the field of Non-Timber Forest Product (NTFP) by establishing a world class Medicinal and Aromatic Plant based Processing Industry to uplift the less privileged community in Nepal" Click here to read more

Convert Trash into Cash

2011-03-14T20:20:00.000-07:00

"Growth in the population and number of households is the foremost factor affecting solid waste and its management. Cities are growing at a rate ranging between five percent and 12 percent—much higher than the overall growth rate of Nepal (2.24 percent). Major cities like Kathmandu and Pokhara are estimated to double their population within the next ten years. With rapid urbanisation and changing consumption patterns, solid waste management has become a major challenge in most of the nation’s urban centres, particularly the larger ones. According to the Central Bureau of Statistics, only 17 percent of urban households have their waste collected by waste collectors. Furthermore, in low-income households (indicated by houses having no toilets) only two percent have their waste collected. " (Source:Kathmandu Post)

Click here to read more

Healthcare in Nepal

2011-03-14T19:48:00.000-07:00

Business Model for Rural Nepal ...

2011-03-11T11:52:00.000-08:00

A Pay-Per-Use approach in which consumers pay lower costs for each use of a group-owned facility, product, or service. This limits the impact on their cash ﬂow while the sheer numbers of consumers makes the proposition sufﬁciently attractive for thirdparty providers.
A pared-down, No Frills service that meets the basic needs of the poor at ultra-low prices and still generates positive cash ﬂow and proﬁts through high volume, high asset utilization, and service specialization.
Paraskilling, which combines No Frills services with a reengineering of complex services and processes into a set of disaggregated simple standardized tasks that can be undertaken by workers without specialized qualiﬁcation.
Distribution networks that reach into remote markets via Shared Channels, piggybacking products and services through existing customer supply chains, thus enabling poor people to afford and gain access to socially beneﬁcial goods
A system of Contract Production that directly involves small-scale farmers or producers in rural supply chains. The contractor organizes the supply chain from the top, provides critical inputs speciﬁcations, training, and credit to its suppliers, and the supplier provides assured quantities of specialty produce at fair and guaranteed prices.
A variety of Deep Procurement setups that bypass traditional middlemen and reach into the base of the economic pyramid, enabling direct purchases from large networks of low-income producers and farmers in rural markets and often providing training for quality and other speciﬁcations.
Demand-Led Training that applies a formal-sector “temp agency” model to down-market opportunities, with enterprises paying a third-party to identify, train, and place employees for job openings at the edges of the formal and informal sectors. Click Here to read more (Source:Monitor Group)

Tele medicine for rural Nepal ??

2011-03-06T15:38:00.000-08:00

Problem: "Many public health centers in the rural areas of the country have remained without doctors for several months. Reportedly, 54 health centers in 36 districts and some district hospitals are without doctors as they are reluctant to practice in remote places like Mugu, Rolpa, Dolpa, and others, where living conditions are harsh and luxury a far cry. In Tahu health centre, Palpa, for instance, a doctor has remained absent from duty for 11 straight months and that too without informing the authorities. On an average, doctors remain absent from duty for as long as six months. " Click here to read more

Solution ?: "Telemedicine uses ICT to "provid[e] accessible, cost-effective, high-quality health care services," in the words of a recent WHO Global Observatory for eHealth report. Telemedicine models, in which rural patients are connected to trained physicians over telephone or Internet, can become the first point of access for a variety of illnesses and diseases such as eye related issues, intestinal problems, infections and heart disease. Most importantly, patients get into the health system early and do not delay care seeking for fear of transportation and costs.

Today, CHMI profiles more than 55 telemedicine programs globally including 24 in India (program implementers and CHMI's partners in 16 countries are continually adding new programs to the open database)." Click here to read more

Health sector attracts huge investments | National | Business | ekantipur.com

2011-03-06T04:29:00.000-08:00

Health sector attracts huge investments | National | Business | ekantipur.com

The Post-Washington Consensus | Foreign Affairs

2011-02-23T20:57:00.000-08:00

The Post-Washington Consensus | Foreign Affairs

Health Care over Climate change ...

2011-02-16T17:26:00.000-08:00

In an recent article Mr.Anil Bhattarai argued " The World Bank’s mission is currently in Kathmandu as a part of the process of finalising a grant and loan for Pilot Project on Climate Resilience (PPCR). As it stands, US $60 million of the total of US $110 million proposed is supposed to be given as a loan, the rest as a grant. The putative aim of the project is to increase the resilience of Nepalis in the face of vulnerabilities arising out of changing climates. The impacts of changing climates might be too complex to understand for ordinary Nepali citizens, but most of them have done virtually nothing to cause this. To be more precise, most of us—both living at present and long dead—did not spew the colossal amount of carbon and other heat-trapping gasses into the earth that led to global warming. This makes it highly unethical to receive a loan for dealing with the impacts of climate change we had very little role in creating in the first place." (Source: kathmandu post)

My thought:

Nepal should care less about vulnerabilities arising out of changing climates and more about other challenges like health ?? If Nepal is planning to borrow money from the multilateral agencies the fund should go towards improving health sector of the country............

WHY ?

"In 2008, the Copenhagen Consensus Center asked a group of the world’s top economists to identify the “investments” that could best help the planet. The experts – including five Nobel Laureates – compared ways to spend $75 billion on more than 30 interventions aimed at reducing malnutrition, broadening educational opportunity, slowing global warming, cutting air pollution, preventing conflict, fighting disease, improving access to water and sanitation, lowering trade and immigration barriers, thwarting terrorism, and promoting gender equality. Guided by their consideration of each option’s costs and benefits, and setting aside matters like media attention, the experts identified the best investments – those for which relatively tiny amounts of money could generate significant returns in terms of health, prosperity, and community advantages. These included increased immunization coverage, initiatives to reduce school dropout rates, community-based nutrition promotion, and micronutrient supplementation.By putting all benefits to individuals, communities, and countries in monetary terms. Expert researchers for the Copenhagen Consensus found that carbon offsets are a relatively ineffective way of reining in global warming and reducing its effects – $10 would avoid about $3 of damage from climate change. By contrast, $10 spent on Vitamin A supplements would achieve more than $170 of benefits in health and long-term prosperity.One lesson we can draw is that while global warming may exacerbate problems like malnutrition, communities bolstered by adequate nutrition will generally be less vulnerable to climate-based threats. Overall, we can typically best help through direct interventions, including micronutrient supplements, fortification, biofortification, and nutritional promotion." (Source:Project Syndicate )
Nepal health care workforce is inadequate with only 2.1 physicians, 2.2 nurses, 2.4 midwives, and 0.1 pharmacists per 10,000 population and these providers are skewed toward urban areas.
The proportion of the government budget allocated to Non Noncommunicable disease (NCD)-related activities for FY2009–10 is negligible, at 0.73 percent. Taxation of tobacco and alcohol products constitutes the main funding source for NCD activities. NCD spending is mainly on tobacco control, nutrition, and cancer programs (Source:World Bank)

good economics need not always mean good politics...Is Nepal's development economics tht good?

2011-02-15T21:59:00.001-08:00

In terms of overall human development, Nepal has moved from being a ‘low human development' country with Human Development Index (HDI) less than 0.5 in the 1990s to a‘medium human development country’ (HDI between 0.5 and 0.8). However, amongst this group Nepal ranks in the bottom quartile (UNHDR, 2009). Nevertheless, between 1980 and2007, Nepal maintained an average annual HDI growth rate of 2.16%, the highest in the world (UNHDR 2009)

"One lesson of the Arab annus mirabilis, then, is that good economics need not always mean good politics; the two can part ways for quite some time. It is true that the world’s wealthy countries are almost all democracies. But democratic politics is neither a necessary nor a sufficient condition for economic development over a period of several decades." CLICK HERE TO READ MORE

Nepal's SME and its productivity........melting like the Himalayas

2011-02-14T04:35:00.000-08:00

About 100,000 of a total of 214,000 small scale industries have already ceased operations. More than 50 percent of those present under operation are financially ailing.
Lengthy power cuts have forced cottage and small-scale industries in the country to reduce their production by up to 70 percent. The nation is suffering a 14-hour power cut every day.
Small entrepreneurs also informed that increasing bank rates was also creating difficulty for them.

Click here to read more

http://www.economist.com/blogs/dailychart/2011/02/daily_chart_forests

2011-02-11T07:59:00.000-08:00

http://www.economist.com/blogs/dailychart/2011/02/daily_chart_forests

PAF, Helvetas sign pact to uplift rural poor

2011-02-10T06:08:00.001-08:00

Click here to read

Khetan Group sells cash cow to foreign partner

2011-02-09T22:12:00.000-08:00

Click here to read

Nepal need Investments not loans

2011-02-09T21:17:00.000-08:00

International Monterey Fund claims that the world is in a process of “double speed recover”. Developing nations are growing at a high single digit rates, whereas, developed countries are growing at a much slower rate. At the annual World Economic Forum Summit in Davos, policy wonks and economists concluded that developing countries are aiding the developed countries to gain economic growth momentum. Low economic growth in the west coupled with the escalating dangers of climate change has compelled western investors to look for investment avenues in uncharted areas of developing countries.Along with foreign institution investments, western investors are also investing in sector like renewable energy, agricultural, health, microfinance and education in the developing world. India, China and few African countries are the biggest recipients of investments in the sectors mentioned above. foreign equity injection in sectors like renewable energy, microfinance or education is not only providing decent financial returns to the investors but it also empowering the individual and the communities receiving these investments. Experts have coined financial investments that also have a positive social impact as impact investment.

Unfortunately, despite being a developing country Nepal has not had much success in attracting impact investments. Impact investment can help to drive up the entrepreneurial spirit among the youth of Nepal, create employment, improve the living standard and most importantly wean the country from foreign loans . Instead of patting its own back for securing loans like Extended Credit Facility loan from IMF and Strategic Programme on Climate Resilience from World Bank, It would be more effective and impactful if government of Nepal starts doing homework to chalk out frame work to bring in foreign investments in sectors that have traditionally funded by foreign loan. While the foreign loan increase the government debt, foreign capital flowing in reduces the burden on current account deficit of the country. Impact investments usually flow into a country through financial entities like venture capital firm, private equity or private endowments.Rules and regulation to oversee the non-banking financial entities in Nepal in still in immature stage. Nepal Rastra bank and Finance Ministry should immediately consolidate rules that will govern and incentive foreign investment in sector that have direct correlation to human development.

Health crisis in Nepal

2011-02-09T18:19:00.000-08:00

Problem: Nepal faces health crisis: WB report

Possible Solution :Please Call Me' Builds Health Education Networks

Different ways to finance your entrepreneurial venture

2011-02-06T01:02:00.000-08:00

EQUITY VS NON-EQUITY
GOVT GRANTS AND LOANS
CREDIT GUARANTEE SCHEME Click here to read more

Nepal Rastra Bank Put your act together ...

2011-02-04T14:56:00.000-08:00

The central bank governor urged the business community and the general public to save their money in the bank account to ease up the liquidity crisis and lower the interest rates .Same day, Nepal Rastra Bank rejected the request submitted by Nabil Bank and Kumari Bank to setup and manage mutual funds.Nepal Rastra Bank decision to reject the request of the two commercial banks acts as an contradictory to governor’s request to the general public to increase deposit in the commercial banks.

Mutual funds can attract capital from FII and remittances
Mutual Fund is a perfect platform for the small investors who have capital but lack time,knowledge and skills to invest in capital market.
Mutual funds can be a vital financial instrument/product to inject capital into the private sector...

8888 financial cooperatives in Nepal...

2011-02-02T21:02:00.000-08:00

8888 savings and credit cooperatives catalyst for financial inclusion or unregulated loan sharks ??
66 coffee cooperatives....."Hello Starbucks and whole foods"..great Himalayan coffees for sale ..

Click here to read more

Anyone here speak NGOish?

2011-02-01T20:12:00.000-08:00

favourite words of NGO ( GLOBALLY)

empowerment
capacity-building
stakeholder
civil society
facilitators
disadvantaged
British NGOs have a fondness for “focal groups”.
Americans like anything that leads to “inclusion”, especially of the “excluded”. (SOURCE : THE ECONOMIST ) Additional favorite WORDS of NGOs in NEPAL
VALUE CHAIN ANALYSIS
DALIT
REFLECTION SESSION
WORKSHOP
REQUEST FOR PROPOSAL
Draft Report
CDO (Saab),Sachib jee

Nepal deprived sector lending certificates ?

2011-01-31T19:58:00.000-08:00

Initiative for Responsible Investment at Harvard University recently came out with a report Impact Investing: A Framework for Policy Design and Analysis. This report talks about the role of the government to make impact investment more impactful and how to nurture the still immature sector of impact investment..I did not get to read the entire report but I had a chance to go through the Case study done in India’s priority sector lending.

Here is the summary of the case study:

“For more than four decades, the Reserve Bank of India (RBI) has required all public

and private banks to direct a fixed percentage of lending to “priority sectors,”

which it defines as underserved or priority areas for economic growth.

Today, state-owned and private banks must make 40 percent of all loans to the

priority sector, whereas foreign banks have a minimum requirement of 32 percent.

The priority sector includes agriculture, small enterprise, retail trade, education,

and housing finance. The RBI decreed in 1998 that one-fifth of priority sector

lending must go to “weaker section” small business and agricultural borrowers.

A proposed scheme of tradable Priority Sector Lending Certificates (PSLCs) has

recently emerged as a potential strategy to improve efficiency and inclusion

of the poor in the priority sector. If this scheme is implemented, banks will

purchase low-risk PSLCs in fulfillment of their lending requirements, largely from

microfinance institutions. PSLCs have the potential to increase the role of MFIs

is providing more efficient and lower cost services to India’s poor urban and

rural borrowers.”

· Commercial banks and other financial institutions in Nepal also have to comply with the similar kind of policy –“deprived sector lending policy”. Under this policy provision, commercial banks are liable to lend up to 3 percent of their total loan outstanding to deprived sector. Socially deprived women, endogenous, lower caste, blind & hearing impaired, disabled, craftsman, artisan, small & marginal farmer and landless people are categorized as deprived sector.

· PSLCs model/scheme should be replicated in Nepal but with a slight value addition … Option to buy certificates should not be limited just to the financial institution. Nepali Diasporas (Nepal received $3.5 billion of remittance every year), International donors and foreign and domestic impact investors should be also allowed to buy and trade these certificates.

Nepal Youth and Small Enterprise Self-Employment Fund (YSESEF)

2011-01-30T19:26:00.000-08:00

In 2009, the Government of Nepal (through the Ministry of Finance) launched the Youth and Small Enterprise Self-Employment Fund (YSESEF) Programme in order to provide the opportunity of self-employment to the unemployed youths and to small business people. The Ministry of Finance (MOF) has been working in collaboration with the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), which has its local Chambers of Commerce and Industry (CCIs) all over the country. The YSESEF Programme includes four steps:

1) Application and registration at CCIs

2) Participation in orientation training on small business and entrepreneurship (3 days) provided by CCIs

3) Application for a loan up to the maximum amount of Rs. 200,000 through banks and financial agencies

4) Utilisation of the loan for establishment of new small-scale businesses or strengthening of existing small-scale businesses

The programme was widely advertised in the media. There has been record response to the programme from the public and around 600,000 applicants have been registered in local CCIs. More than 80% of the registered applicants have already received the 3-days orientation training.(Source:GTZ)

Complete Report

Davos Annual Meeting 2011 - India's Inclusive Growth Imperative

2011-01-30T19:08:00.000-08:00

Great Panel debating on How to achieve inclusive economic growth ....
Everyone in the panel agrees helping the poor or expanding to the rural area is not just mere CSR...
Home Minister argues despite the emergence of increasing private sector involvement in the inclusive growth movement,State have a every important role to play...
Home Minster also states - Country where entrepreneurial spirit is embedded in the often resist foreign direct invest.... this statement reminded me of a this story
No matter what you do agricultural growth rate cannot out run or match growth in Service and industrial sector... to reduce poverty and create rural employment ..its is very important to create jobs in sector other than agriculture.................

Tele density in Nepal as of 2011 37%

2011-01-23T21:18:00.000-08:00

Click here to read

A recent article in The Economist profiled mPedigree, an incredible cell phone service available in Ghana and Nigeria that can verify if the drug you just bought is legitimate or counterfeit.

Road construction in Villages Development or Destruction

2011-01-23T21:06:00.000-08:00

Click here to read

4 Ideas for Financial Inclusion

2011-01-23T20:53:00.000-08:00

Click here to read...

ECONOMIST KANCHA

Social Venture Fund in Nepal

Nepal Investment Year and Investments in Small Businesses

Example for Bilateral Investment Promotion and Protection Agreement

Corporate bonds & Nepali Private sector

Investing in Nepal- risk associated

Investing in Education, Lesson from India

Things I read today -Jan 16 2012

Post Money Valuation of Solatee Hotel approximately $25 mill - 2011-2012

Things I read Today - 01/17/2012

Access to Energy- Nepal

The Dolma Development Fund - Impact Investing in Nepal

Affordable housing for poor and slum dwellers in Kathmandu??

HABITAT FOR HUMANITY NEPAL

Clumsy Success is better than elegant failure

Should Nepal Ambulance Service (NAS) adopt India's dail 1298 model

Things I read today : Jan,08,2012

Firms with benefits- click more to read

Nepali Stock market my way....

CATCH 22 : Youth self-employment fund faces two-pronged problem

Kathmandu's population - 4 million ... total number of public toilets 32

Nepal Investment Board should bring in investments in social enterprises

Collaborators or competitors for the Nepali Commercial Banks

Youth Self-Employment Programme- A classical case of financial inclusion failure......

What is Impact Investing?

Impact investment in ASIA .... And again Nepal is not even mentioned,WTF?

Need For micro insurance products in Nepal

Will RMDC's public offering open doors for retail impact investing in Nepal... International impact investors should buy RMDC stocks

Clean Engine Motorcycle Taxi in Kathmandu?

Interesting FDI facts ..

insuring the poor in Nepal .....

Prime MinisterOF Nepal in India ....... begging thy neighbor ??

Cabinet okays BIPA, DTAA signin .Gives go-ahead to the $250m line of credit deal.....click here to read more

Walking the talk....

Taak-Tuuk-----Nepali frugal innovation

ENERGY for all ..Investing in Nepali energy sector...

Some 57 percent households in Nepal do not have an access to toilet

Inspiration ??

garbage disposal in Kathmandu .....Can Khate enterprise be a solution

Affordable Ambulance

What is a business model ?

Tata nano - not serving the Nepali bottom of the pyramid market ...

Social impact diaspora bonds can be a innovative financial product to put remittances to good use..

Venture Fund regulation in Nepal ?

It is not finance,stupid!

Nepali social venture fund

Non-Fundable Zones

SME in Nepal

branchless banking Nepal

Energy Economics Nepal....

Sorry state of rural electrification in Nepal

Fake medicine Nepal.......

Nepal's biggest dairy farm .....

Bhat Bhateni and Big Mart helping or hurting Nepali Janta ????

Balance Sheet of financial cooperatives are fatter than that of commercial banks

Investment wanted...Invest in Nepal energy sector ...

water water everywhere and not a drop to drink??

Indian foreign policy.....

Dead Capital in Nepal ...2011 International Property Rights Index

Drip water Irrigation Nepal

Wind Energy in Nepal

Pro enterprise financial reform in Nepal ??

Chaudary group and rural farmers ......................

Convert Trash into Cash

Healthcare in Nepal

Business Model for Rural Nepal ...

Tele medicine for rural Nepal ??

Health sector attracts huge investments | National | Business | ekantipur.com

The Post-Washington Consensus | Foreign Affairs

Health Care over Climate change ...

good economics need not always mean good politics...Is Nepal's development economics tht good?

Nepal's SME and its productivity........melting like the Himalayas

http://www.economist.com/blogs/dailychart/2011/02/daily_chart_forests

PAF, Helvetas sign pact to uplift rural poor

Khetan Group sells cash cow to foreign partner

Nepal need Investments not loans

Health crisis in Nepal

Different ways to finance your entrepreneurial venture

Nepal Rastra Bank Put your act together ...

8888 financial cooperatives in Nepal...