micro, small and medium enterprises of construction …

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FINAL REPORT

JULY 25, 2018

Submitted To

Mott MacDonald,

Kathmandu, Nepal

Submitted By

Nepal Development Research Institute Shree Durbar Tole, Pulchowk, Lalitpur

GPO Box: 8975, EPC 2201,

Kathmandu, Nepal

Email: [email protected]

Telephone: +977-1-5537362, 5554975

MICRO, SMALL AND MEDIUM ENTERPRISES OF CONSTRUCTION

MARKET IN NUWAKOT AND DHADING DISTRICTS, NEPAL

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Nepal Development Research Institute (NDRI) is pleased to be a part of Mott McDonald’s Micro,

Medium Small Enterprise project. We thank Mott McDonald for entrusting NDRI to carry out such an

important study. We express our sincere thanks to Mr. Howarth Simon E, Team Leader of PURNIMA

and Mr. Rabindra Bahadur Singh, Private Sector Development Lead, for extending requisite

administrative and management support in organizing and hosting the assessment.

We would like to thank all the participants for their kind participation in the study. We are grateful to all

the government stakeholders, Mayors and President of municipalities, ward chairpersons of the sample

municipalities, chief administrative officers, district leaders of FNCCI, FNCSI, District Contractor

Association, and business leaders for taking time out of their busy schedule for the study. NDRI also

acknowledges their contribution in this research. The interactions with each of them have contributed

significantly to develop the report.

Last but not the least, NDRI also offers gratitude to the entire research team: Prof. Dr. Punya Prasad

Regmi, Team Leader, Mr. Jeebanath Adhikari, Team Coordinator, and the field researchers Mr. Ram

Prasad Devekota, Rita Pandey, Manoj Karki and Sunita Dhital for their hard work from inception period

to project accomplishment.

Dr. Jaya Kumar Gurung

Executive Director

Nepal Development Research Institute

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Table of Contents Table of Contents .................................................................................................................................. 3

Abbreviation and Acronyms .................................................................................................................... 5

List of Tables .......................................................................................................................................... 6

List of Graphs and Figures ....................................................................................................................... 7

Executive Summary ................................................................................................................................ 8

CHAPTER ONE .................................................................................................................................. 10

INTRODUCTION TO STUDY ........................................................................................................... 10

1.1 Background .................................................................................................................................... 10

1.2 Objectives ................................................................................................................................. 11

1.3 Scope of the Study .................................................................................................................... 11

CHAPTER TWO................................................................................................................................. 12

RESEARCH METHODOLOGY ........................................................................................................ 12

2.1 Method and Tools ...................................................................................................................... 12

a. Desk Review ......................................................................................................................... 12

b. Site Selection......................................................................................................................... 12

c. Primary Data Collection ...................................................................................................... 13

d. Direct Observation ............................................................................................................... 13

e. Quick Survey: ....................................................................................................................... 14

f. Key Informant Interviews: ................................................................................................... 14

2.2 Field Monitoring, Management and Quality Assurance .......................................................... 14

Pre-testing of research tools and finalisation .............................................................................. 14

Recruitment and Orientation Training to Research Team: ....................................................... 14

2.3 Data Management and Analysis Plan........................................................................................ 15

2.4 Deliverables and Timelines ........................................................................................................ 16

CHAPTER THREE............................................................................................................................. 17

MAPPING OF SMALL ENTERPRISES ........................................................................................... 17

3.1 Construction Materials and Suppliers ...................................................................................... 17

3.2 Development of Markets in Nuwakot District .......................................................................... 18

3.3 Estimated Number of Small Enterprises of Construction Market in Nuwakot District .......... 20

3.4 Development of Markets in Dhading District ........................................................................... 20

3.5 Estimated Number of Small Enterprises of Construction Market in Dhading District........... 23

3.6 MSME Registration ................................................................................................................... 23

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3.7 Source of Investment for MSMEs in Construction Market ..................................................... 24

CHAPTER FOUR ............................................................................................................................... 26

FINANCIAL REQUIREMENTS AND ITS ARRANGEMENT ....................................................... 26

4.1 Willingness to Expand Business ........................................................................................... 26

4.2 Utilization of Fund to Expand Business .................................................................................... 27

4.3 Availability of Capital to Expand Business ............................................................................... 27

4.4 Source of Capital to Expand Business ....................................................................................... 28

4.5 Problems in the Source of Loan................................................................................................. 29

4.6 Required Size of Capital for Business Expansion ..................................................................... 31

CHAPTER FIVE ................................................................................................................................. 33

CONSTRAINTS OF MSMEs ............................................................................................................. 33

CHAPTER SIX.................................................................................................................................... 36

CONCLUSION AND RECOMMENDATIONS................................................................................. 36

6.1 Conclusion...................................................................................................................................... 36

6.2 Recommendations .......................................................................................................................... 37

Annex –I: Situation Analysis of Sample Municipalities and Market Area in Dhading ..................... 39

Annex – II: Situation Analysis of Sample Municipalities and Market Area in Nuwakot.................. 41

Annex – III: Data Collection Format in Municipality and District ................................................... 43

Annex – IV: Area of Data Collection and Respondents in Districts .................................................. 44

Annex – V: Sample Respondents in Districts ..................................................................................... 45

Annex VI: Quick Survey Questionnaire for Supply Side Actors ....................................................... 46

Annex VII: KIIs for Financial Intermediaries ................................................................................... 48

Annex VIII: KIIs Questionnaires for Municipality ............................................................................ 49

Annex IX: Observation Notes on Market Prospects .......................................................................... 50

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Abbreviation and Acronyms

BFIs: Bank and Financial Institutions

CFUG: Community Forestry User Group

CSEB: Compressed Stabilized Earth Blocks

DCCI: District Chamber of Commerce and Industries

DDC: District Development Committee

DFID: Department for International Development

DRR: Disaster Risk Reduction

GDP: Gross Domestic Product

GoN: Government of Nepal

HCB: Hallow Concrete Block

KII: Key Informant Interview

MSMEs: Micro, Small and Medium Enterprises

MSD: Market System Development

MOI: Ministry of Industry

NAMDP: Nepal Agriculture Market Development

NBSM: Department of Nepal Bureau of Standard and Metrology

NDRI: Nepal Development Research Institute

NPER: Nepal Post Earth

NRA: Nepal Reconstruction Authority

OPC: Ordinary Portland Cement

PPS: Probability Propionate to Sample

PSD: Private Sector Development

PURNIMA: Post Earthquake Recovery Project NAMDP: Nepal Agricultural Market Development Programme

SMEs: Small and Medium Enterprises

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List of Tables Table 1: Division of MSMEs based on the fixed capital and other factors ............................................... 11

Table 2: Study tools and sample distributions ........................................................................................ 13

Table 3: List of different MSMEs present in Nuwakot District ……………………………………………………………….19

Table 5 Different enterprises present in Dhading District ....................................................................... 22

Table 5: Loan capital requirements for MSMEs to expanding business………………………………………………….31

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List of Graphs and Figures Figure 1: District Map, rivers, and roads passes in Nuwakot District ........ Error! Bookmark not defined.

Figure 2: Estimated MSMEs in Nuwakot district ................................................................................... 20

Figure 3: district map, rivers, and roads passes in Dhading district ......................................................... 21

Figure 4: MSMEs in construction market in selected municipalities in Dhading district ......................... 22

Figure 5: Total MSMEs in Dhading district ........................................................................................... 23

Figure 6: Number of registered and non-registered business ................................................................... 24

Figure 7: Source of loan for business establishment by business............................................................. 25

Figure 8: Source of loan for business establishment by municipality ...................................................... 25

Figure 9: Business expansion in near future, by business........................................................................ 26

Figure 10: Business expansion in near future in municipality ................................................................. 27

Figure 11: Own capital to expand business ............................................................................................ 28

Figure 12: Own capital to expand business by enterprises ...................................................................... 28

Figure 13: BFIs source of loan for business expansion in near future...................................................... 29

Figure 14: Old saving as a source of loan for business expansion in near future ..................................... 29

Figure 15: Problems in the source of loan .............................................................................................. 30

Figure 16: Problems in the source of loan .............................................................................................. 30

Figure 17: Average size of loan demand for MSMEs in rural and urban municipalities .......................... 31

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Executive Summary

The reconstruction process is lagging behind in Nepal. Studies have revealed that current market

system has not been able to deliver construction materials sufficiently and services efficiently to

earthquake victims in rural areas. Private Sector´s development therefore is the key task to

support on reconstruction processes. Information about Micro, Small, and Medium Enterprises

(MSMEs) of construction market is very important for economic growth and improving

livelihood through post-earthquake recovery. The market system development approach seeks to

identify the key constraints of market and practical solution.

The overall objective of this study is to assess MSMEs of construction market in Nuwakot and

Dhading districts. The specific objectives are to map out the MSMEs, identify financial

requirements and major constraints limiting MSMEs.

The methodology used both the quantitative and qualitative approaches. Questionnaire survey

was conducted with the hardware enterprises, crushers, brick suppliers/Kilns, Compressed

Stabilized earth block/Hallow concrete block producers, stone cutters, sand extractors,

Furniture/timber treatment enterprises, transporters, contractors, and metal worker/grillers.

Altogether, 116 quantitative surveys, 12 in-depth interviews, 10 field observations, 24 key

informant interviews were conducted.

The current reconstruction process is lagging behind mainly due to the market supply gap of

construction materials. The presence of construction based MSMEs are highly concentrated

around the headquarter cities and major roads around the rivers, while the presence of these

MSMEs is very poor at the rural hilly areas. Therefore, construction based MSMEs are largely

affected by headquarter based government institutions, prevailing river with local raw materials,

and development of road networks. As compared with the urban municipalities, rural

municipalities have more supply constraints of construction materials along with topographical

difficulties and lack of market information.

A large number of mini contractors were not legally registered in construction markets. The

functional existence of BFIs and Cooperatives were adequate in headquarter and urban cities

followed by a good presence of road access. In contrast, their poor presence was observed in the

rural area. Majority BFIs have used separate loan product to flow out their loan to MSMEs. But

problems such as insufficient source of income, high cost of capital, process barriers, inadequate

collaterals, lack of proper business plans and low level education of customers were some of the

constraints in providing loan to such enterprises. Therefore, commercial banks offer limited loan

in general category rather than commercial ones. An overwhelming proportion of MSMEs

respondents (82%) reported that they wish to expand their business with financial support of

BIFs, however, they did not have required amount of own funds and capital to invest in their

businesses. Such barriers were prevailing in both policy and operational levels for the

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establishment of MSMEs. Based on key findings, following policy and operational

recommendations are provided:

(a) Recommendations for construction market development: Local level development

affects positively on construction market. Therefore governments should have plan of

physical infrastructure development such as roads, electricity, communication, etc. to

address the constraints of the rural area through the private sector. Governments have to

address these problems through a broad based and inclusive market development

approach. Market supply gap on construction materials should be filled in support of

government entities. There is a frequent problems of high price and monopoly power

exerted by the few suppliers working on the sand and concrete pebbles. Hence,

Government and other authoritative bodies should provide subsidies and other incentives

to construction based MSMEs to expand the construction market. Also, the locally

produced materials have to be extracted in such a balance way that reconstruction as well

as local construction will have an adequate supply along with the protection of

environment. Governments should have a balanced tax and royalty approach to address

the local demand and for utilization of locally produced materials. Governance reform

can be the better practice for the supply of local needs. Those existing local level

enterprises should also be locally registered/informed as the registration of micro and

mini contractors and transporters were missing at the local level. Local governments have

to reduce the cost of registration and compliances and procedurals. Some institutional

problems such as low level of education and problems in existing MSMEs expansion

should also be addressed.

(b) Recommendations on access to finance: Government bodies should develop long terms

plans and policies to encourage new BFIs branches which focus on small and micro

enterprises (SME) loan in rural areas. The supply side reforms should be: (a) increase the

proportion of MSME business loan, (b) adopt digital technologies such as cloud

computing, distributed ledger technology, artificial intelligence that can reduce the

transaction cost of BFIs significantly, (c) decrease the lengthy procedures of lending and

documentation, (d) include rural social aspects in the risk mitigation measures- scoring

matrix of BFIs, (e) enlarge the scope of assets in the list of collaterals, (f) reduce the cost

of credit information among MSMEs, (g) educate MSMEs on business development plan

and strategies. The demand side recommendations are: (a) increase the payment capacity

of MSMEs, (b) reform in the practice of credit transaction of MSMEs, (c) reduce the cost

related to the business registration, audit reports and tax compliance (d) reduce the cut

throat competition among MSMEs, (e) establish the credit market infrastructures, (f)

orient MSMEs and credit market information, (g) develop the local level physical

infrastructures of development, etc.

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CHAPTER ONE

INTRODUCTION TO STUDY

1.1 Background

National Reconstruction Authority (NRA) was established under the “Act relating to

Reconstruction of the Earthquake affected Structure, 2015”1 on December 2015 with an aim to

facilitate overall reconstruction process and build resilient settlement and prosperous society in

earthquake affected districts. However, current reconstruction process of Nepal is lagging

behind. In addition to several other constraints, studies have revealed that current market system

has failed to deliver construction materials and services to earthquake victims in rural areas2.

Market is a powerful and autonomous institution/mechanism that ensures delivery of

construction materials and related services for the earthquake victims. However, barriers that

limit supply of construction materials and related services have to be addressed through an

external supportive mechanism to facilitate reconstruction process in the earthquake affected

districts. Market System Development (MSD) Approach 3 emphasises ‘flexibility’ and

‘creativity’ as an essential part in complex market system. It aims to improve efficiency by

incorporating all relevant sectors and through a broad based inclusive model. Market

strengthening strategies and steps are developed on a need-based approach that facilitates access

to basic services and livelihood development of the poor and marginalized people. MSD

Approach focuses on the relevancy, opportunity, and feasibility to stimulate change in the market

system for the potential pro-poor.

Private Sector Development (PSD) component of UKAID funded, Post Earthquake Recovery

Project (PURNIMA), is tasked with working with 200 Small, Medium and Micro (MSMEs)

enterprises in construction sector for generating economic growth and improving livelihood. The

PSD component has adopted a market systems development (MSD) approach in the design and

implementation of activities. The approach seeks to identify the key constraints of the market

and remove them through catalytic actions. It is setting up solution to generate ideas to improve

the access of micro, small, and medium enterprises (MSMEs) to finance, which has been

identified as one of the key constraints. It has planned for a quick assessment of MSMEs in

Nuwkaot and Dhadhing districts.

1An Act Made to Provide for reconstruction of Earthquake affected structures with legal provision on the establishment of National Reconstruction Authority. 2 Forthcoming report of NDRI, UNOPS and DFID on titled “A Detail Study on Poverty and Vulnerability in Four Earthquake Affected Districts” 3 http://blogs.lse.ac.uk/southasia/2017/10/18/understanding-the-economics-of-inclusion-a-perspective-on-nepal/

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1.2 Objectives The overall objective of this study is to assess MSMEs of construction market in Nuwakot and

Dhading districts. The specific objectives are:

I. To map out existing MSMEs of construction market.

II. To understand financial requirements and arrangements of MSMEs.

III. To identify major constraints that are limiting the business of the MSMEs.

1.3 Scope of the Study The assessment covered the construction sector´s market MSMEs at the district level and local

levels in urban and rural municipalities in Nuwakot and Dhading districts. The scope of this

study was to map out MSMEs with information of total numbers and operational status, volumes

of business transaction and expansion plan, needs of financial arrangements and requirements,

and market constraints that limit to MSMEs for the development of construction market

businesses. The industrial classification for the MSMEs according to Industrial Act, 2073 (first

amendment) has following requirements:

Micro Enterprise Small Enterprise Medium Enterprise

- The fix capital used in the business

enterprise will be up to NRs. 500,000

except the land and buildings.

- Entrepreneur himself/ herself involves

in the operation and management of

enterprises.

- Maximum number of employees will

be 9 including the entrepreneur

- The annual transaction of the enterprise

will be less than NRs. 5 millions.

- Maximum level of energy consumption

will be less than 20 KW for those

which uses the machinery or

equipment in the enterprise

- The enterprise which is

other than micro and

small enterprises and has

fixed assets up to NRs.

100 million (10 Crore) of

fixed capital.

- The enterprise which

has of fixed assets of

amount from NRs. 100

million (10 Crore) up

to NRs. 250 million

(25 Crore).

Table 1: Division of MSMEs based on the fixed capital and other

factors

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CHAPTER TWO

RESEARCH METHODOLOGY

Market system development approach was administered by NDRI to map out MSMEs in

Dhading and Nuwakot districts. Construction market players were surveyed to identify the

existing situation of MSMEs and map them in terms of their business volume in Nuwakot and

Dhading districts. We explored complex market realities, more specifically, the structural

constraints and impediments in the market incentive mechanisms. Local economic situation,

trade linkages, factor market environment and goods and services of the construction industry

were taken into considerations (For more details, please see the Annex-I & II). The respondents

were the owners of micro and small enterprises working in the supply side of construction

materials in Dhading and Nuwakot districts. In addition, NDRI conducted a quick quantitative

assessment survey with sample MSMEs of construction market. NDRI developed format (For

more details, please see the Annex-III) and organized the Key Informant Interviews (KIIs) with

ward chairperson of each ward of five municipalities sites in Nuwakot and Dhading districts. In

addition, information were gathered from other relevant informants such as business leader of the

market participants, municipality officials, and representatives of professional organizations,

including the respondents of bank and financial institutions and cooperatives, etc. (For more

details, please see the Annex-IV)

2.1 Method and Tools

a. Desk Review

Prior to field plan, scope of study was identified based on desk review of market polices

guidelines, commodities act, program documents of Mott Macdonald, and information related to

the construction market in Nuwakot and Dhading districts. Based on review of market system

development approach and earlier practices in Nepal, an analytical framework, preliminary

research hypothesis, and a general checklist were developed. Both inductive and deductive

approaches were adopted to explore in-depth insights on real market players and information on

the construction materials at the major market, minor market, and rural market in the districts.

b. Site Selection

NDRI in consultation with the team of Mott Macdonald purposively selected sample

municipalities (For more details, please see the Annex-V) to get information of the districts.

Similarly, the markets were identified for research site after consultation in each district. With

district´s information samples were collected from supply side market forces of construction

industry. NDRI in consultation with the team of Mott Macdonald considered the participants of

supply side market. Information of real market participants was also considered from the supply

side forces. We randomly picked each respondent on their availability in each level of market.

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The research team employed probability proportional to sample size (PPS) tools to select

required numbers of sample from each selected market area.

Area Bidur Belkotgadhi Tadi Likhu Dupcheswor Total

Questionnaire

Survey 35 5 11 4 2 57

KIIs 5 2 2 2 2 12

Interview 2 1 1 1 1 6

Observation 1 1 1 1 1 5

Area Nilkantha Dhunibesi Sidhhalek Benighat Gajuri Total

Questionnaire

Survey 21 14 11 13 10 69

KIIs 5 2 1 2 2 12

Interview 2 1 1 1 1 6

Observation 1 1 1 1 1 5

c. Primary Data Collection

116 quick quantitative surveys were conducted within the supply side construction market

players in the sample area. The research team considered the major and minor market areas of

the sample districts. Survey was conducted in each district with producers and traders involved

in the construction market. 10 qualitative interview with selected respondents of business and

political leaders, market chain suppliers and 22 KIIs were conducted with the respondents from

bank and financial intermediaries (For more details on format, please see the Annex-VII) who

were involved in flowing out loan in each selected area. NDRI considered only those

respondents who had in-depth understanding on both policy and practical barriers on the smooth

function of market. Snow ball sampling approach was used to select the supply chain

respondents. Not only linear marketing chain, research team conducted interview with other

market intermediaries such as government local bodies, ward chairpersons, transport agencies,

etc.

d. Direct Observation

Along during the survey, direct observation was conducted on the development of physical

infrastructures, flow of migration and changes in market, development of the rural market

centers, supply of construction materials including the enterprises trading construction materials

as the producers, wholesaler and retailers. We observed position and prospects of those various

supply side actors with the prospects and challenges of market expansion, and changes in

economic and socio-demographic situation in near future (For more details on format, please see

the Annex-IX). Quantitative data related to quality of stocks, availability and regularity were also

obtained from direct observation and their internal documents.

Table 2: Study tools and sample distributions

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e. Quick Survey:

Quick quantitative survey of 116 MSMEs was conducted on the supply side informants such as

hardware enterprises, crushers, brick suppliers/ Kilns, CSEB/HCB producers, stone cutters, sand

extractor, furniture, transporter, contractor, and metal worker/griller (For more details on format,

please see the Annex-VI). We considered urban and rural market areas in each of five

municipalities in two selected districts. Based on discussion with Mott Macdonald´s team and

scope of analytical framework, survey questionnaires were finalized. Each supply side actors of

the construction market were interrogated on the defined question as developed in consultation

with Mott Macdonald or as per availability and relevancy, and based on the scope of

information. Simple random sampling was utilized in each of the market to select the

respondents. In order to revive gender disaggregated data, survey were administered with female

respondent as far possible.

f. Key Informant Interviews:

KIIs were conducted with selected informants of supply side actors to inform on the supply of

construction materials in terms of types, volume and location in Dhading and Nuwakot districts

(For more details on format, please see the Annex-VIII). In addition, financial intermediaries

were interviewed on the loan market. Quantitative data related to the MSMEs of construction

market were obtained from direct field visits, observation and through their internal documents.

With the mutual consent and understanding of Mott Macdonald, NDRI selected respondents

from selected market, municipalities, FNCCI, FNCSI and respondents who had in-depth

understanding on construction market suppliers including their volume with municipality level

disintegration in Dhading and Nuwakot districts. Policy and practical barriers for smooth

functioning of market were explored. The information received on KIIs was verified in the field

level experiences. Not only with the linear marketing chain, we conducted KIIs with other

market intermediaries, such as financial institution to obtain information on access to capital,

supply of loanable fund, problems of loan market, etc.

2.2 Field Monitoring, Management and Quality Assurance

In order to refine the survey question, KII guidelines and interviewing technique, detail

consultation within project team and research team was carried out.

Pre-testing of research tools and finalisation: Pre-tesing of Questionnaire and checklist were

conducted in Bidur Municipality area. The received feedbacks from pre-testing were

incorporated in final questionnaires.

Recruitment and Orientation Training to Research Team: We administered 4 qualified field

researchers in each district for quick quantitative survey. One-day interaction session on 7th July

2017 was organized to orient about the research project to all field research team members. It

covered overall plans, ethics and field data collection process, precaution to be taken during the

data collection, and possible strategies to deal with the potential issues during the course of field

research. Orientation also covered research ethics and do-no-harm policy topics. Altogether five

experienced researchers were mobilized for KIIs and quantitative survey in the field.

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Field Work: The team was mobilized to collect data in the field during 01 – 12 July, 2018. The

team comprises of 5 members consist of economist as leader and 4 field researchers. Quality

assurance of survey process was ensured through data collection tool, monitoring and

supervision, which were assessed right during data collection, etc. Since, data were gathered

from different research tools, team leader/coordinator triangulated data and interpret findings.

Leader cross checked information collected from enumerators through informal discussions, and

critical observations on researchers’ interpretations4. Further, different entry points for research

were adopted to get access to heterogeneous group of respondents to gather a wide range of data

and perceptions.

2.3 Data Management and Analysis Plan

Data systematizing: Since, the KIIs and interview were conducted in Nepali language, field

notes recorded interviews and other information were translated into English language and the

contents were edited. Translated and edited contents were categorized according to the identical

themes and sub-themes. Those major themes were coded according to the survey objective and

question through self-made tags to understand its content for analysis part. The important and

powerful words, lines and meanings from the dataset were transformed as the topics, sections

and themes for analysis. The refined data were shaped by identifying different alternative

explanations and themes. These dataset were then interpreted based on literatures, contemporary

issues, findings of past and the proposed concepts and practices. Quantitative data obtained from

paper based questionnaire survey were entered into SPSS to check out the missing in the first

phase.

Analyzing data: Analysis was done from initial phase of fieldwork. We analyzed data set with

the literatures on NRA guidelines, market system development approach, successful case-

studies, policy gap and policy and practices in gaps in marketing of construction materials. All

the analysis was presented and arguments were drawn for justifying the conclusion to meet

proposed objectives of the assignment. When all these steps were carried out, data set was

shaped through back and forth linkages, developing alternative ideas, preparing drafts, correcting

and rewriting the content, backup by data and arguments and important cases. Finally, all

analysis was transformed into understandable and meaningful interpretation and presented as

output of this study. Based on available data, we conducted mapping of market suppliers based

on their location, financial requirements and arrangements, business expansion plan including

the business constraints.

Ethics of Research: All the ethical consideration was maintained throughout the research

process and practices. Following considerations were taken into account:

4 Denzin, N. K., (1978). The research act: A theoretical introduction to sociological methods. New York:

McGraw-Hill.

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I. Protection of the personal information: Personal information was not disclosed directly

from the exact identification of the respondents, as the activities may hamper in the life and

business of the respondents. Name and other identification were decoded to protect the

confidentiality during the analysis as required.

II. Voluntary participation and informed consent: Mechanisms to guarantee that all

participants chose to participate in the study of their will were established. They were fully

informed about the procedures of the research project and any potential risks. Both verbal

and written information were provided to the potential participants and written consent hall

be sought, where possible. If written consent could not be obtained (due to the literacy status

of the participants) verbal consent was sought. Additionally, it made clear that participants

were not forced to answer the questions, if they were uncomfortable or they did not want to

answer, and that they could stop their participation anytime. Full participation was

encouraged nonetheless. Permission to audio-record the KIIs were sought with the

participants.

III. Confidentiality and anonymity of the participants: Mechanisms to protect confidentiality

and anonymity of the participants were established. The participants were de-identified.

Codes, rather than participant’s details were used, to identify participants during data

collection and analysis. During transcription it was ensured that any text/ content containing

information that is pertained ‘identifying’ were de-identified or deleted as felt appropriate

during analysis.

IV. Reliability of data: We mobilized highly qualified economist to monitor the activities and

field researchers to collect the field data. Field researchers were exclusively trained to

accurately measure the response of the respondents. We utilized the standard software SPSS

or Excel to process and analyze the data collected from the field.

2.4 Deliverables and Timelines

The key deliverable of the assignment is the final report of findings summarized around the key

thematic areas, disaggregated by gender, municipality, market, and districts. The assignment was

completed within 4 weeks, starting from 27 June, 2018.

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CHAPTER THREE

MAPPING OF SMALL ENTERPRISES The mapping of the business indicates the concentration of MSMEs in the districts. The chapter

includes the construction materials and suppliers, development of markets, estimated number of

small enterprises, registration of MSMEs, and source of investment of MSMEs.

3.1 Construction Materials and Suppliers

Construction Materials: Overall imported and locally produced construction materials were

available in Nuwakot and Dhading districts.

Imported Construction Materials: Construction materials such as iron rod, Galvanized Iron

Sheet, cement, and brick block, CSEB and aluminum were imported from manufacturing

industry and mostly they were brought from outside of district and country. In addition, other

supporting materials like painting enamel, electric, plumbing and sanitation wares were also

brought from manufacturing industry.

Locally Produced Construction Materials: Materials such as stone, timber, gravel, sand and

pebbles were available in nearby areas. Either they were supplied by local suppliers or people

used to directly bring it from source with certain payment of tax at local level.

Construction Markets: Three types of markets existed in each district. Major markets were

located at district headquarters, where there was a presence of large number of suppliers.

Relatively small numbers but with a large scale of business transaction, construction materials

suppliers were located around the high-way markets. Minor markets were located in seasonal

roads (that often close in rainy seasons) which connect few rural municipalities and rural wards.

Contractors: Based on the nature and area, study team observed two different types of

contractors working in survey districts. The first type of contractors were registered contractors

(For more details, please see the Annex-X) who usually contract for large scaled construction

activities and frequently undergo through the tender process to get the bid; the second type of

contractors included contractors who were not legally registered in any of authority but involved

in individual´s home construction activities. These unregistered contractors were large in

numbers in urban, semi-urban and rural areas. The unregistered contractors were migrated

construction worker and locally available construction workers. They individually or in support

with the local elites deal with local people for construction agreement. They have better skill for

constructing rural home and can supply construction labors. However, they were not allowed to

take part in tender process or contracting with government´s construction activities. The

presences of migrated contractors were more concentrated in urban and semi-urban area while

local contractors were limited in the rural level construction.

Material Suppliers: There are three major rivers cross Nuwakot district, namely, Trishuli River,

Likhu and Tadi Rivers. Crushers and sand suppliers are largely located at the bank area of these

rivers.

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Construction materials are largely produced in Trishuli River (in both districts), followed by

Likhu and Tadi Rivers in Nuwakot district. At present, the previously available but unregistered

crusher enterprises have been significantly reduced due to the strict regulation of local

government authorities.

Hardware enterprises: The hardware enterprises are highly concentrated in the district

headquarters (market area). District´s headquarter is a strong base of institutional arrangements

of government offices which set up for a large number of government line agencies. Even today,

it is the only large business area to supply construction materials. The district level market

structure connects to the semi urban and rural market area and municipalities. The semi-urban

and rural markets, though they are emerging as local centers, are not reliable source of supply for

import based construction materials. Therefore, hardware enterprises of local center as well as

district market centers are supplying the import based construction materials.

3.2 Development of Markets in Nuwakot District

Figure 1: District Map, rivers, and road passes in Nuwakot District

19

Bidur, the district headquarter of Nuwakot, is the major market area that connects small

emerging market areas in rural municipalities. Nuwakot district has 3 major rivers called

Trishuli, Tadi and Likhu and construction markets are concentrated around these rivers. More

specifically, the local production of construction materials such as crushers, concrete stones,

sands, etc. are broadly limited around these rivers, while imported raw materials such as

hardware items and bricks are supplied from the district headquarters to local market centers

which are being emerged at the main roads of district´s connection. These materials have been

imported mainly from Kathmandu, Terai market, India, etc. Local market centers import

hardware items and bricks from district headquarter and nearby cities. In addition to district

coverage, the large scale hardware enterprises of Nuwakot supply their construction items to few

municipalities of Dhading district and to a large segment of Rasuwa district.

The major suppliers of construction sector market such as hardware enterprises, brick suppliers,

etc. are located at the major road and major river side area. Development of emerging markets in

Nuwakot district are therefore limited along with the roadside of the Trishuli River (Bidur

municipality), Tadi Khola (Belkotgadhi, Kharanitaar), and Likhu Khola (Dhikure and Chhahare)

and around the road connectivity areas.

The distribution of MSMEs which are working on construction market is influenced by the land

topography such as the hills, river basins, etc. Bidur, Urban Municipality, which lies in the

district headquarters has more than 6 times higher MSMEs (584) in comparison to the MSMEs

available in Dupcheswor Rural Municipality (89). However, emerging markets Likhu has a bit

large number of MSMEs (234) and Tadi has 98 MSMEs (Table 3).

The number of MSMEs in some selected municipalities of Nuwakot district is presented in table 3, below:

MSMEs Dupcheswor Bidur Likhu Tadi

Hardware enterprises 6 52 16 8

Crushers 0 2 2 1

Brick Kilns 2 27 0 5

Hallow Concrete Block (HCB) and CSEB producers 1 14 5 1

Stone Cutting enterprises 4 0 0 0

Sand extractor 7 5 0 1

Timber treatment/furniture enterprises 10 69 0 0

Transporters 28 216 87 35

Mini and Micro Contractors 31 194 103 24

Grill 0 5 21 23

Total MSMEs 89 584 234 98 Source: Ward Chairpersons of the respective municipalities in Nuwakot district, July 2018

According to the registered SMEs of Office of Small and Cottage in District, the number of

SMEs have 247 enterprises based on the construction industry in Bidur municipality (For more

details- please see the Annex-XI). The registered list however does not incorporate the number

Table 3: List of different MSMEs present in Nuwakot District

20

of hardware enterprises, mini and micro contractor, and the transporters. While comparing the

registered small enterprises (crushers, sand extractors, furniture, etc.) with information given by

ward chairpersons of Bidur municipality, we found out a higher number registration in

comparison with whatever observed by the ward chairpersons.

3.3 Estimated Number of Small Enterprises of Construction Market in Nuwakot

District

The estimate of MSMEs shows that the number Hardware enterprises, Crushers, Brick Kilns and

suppliers, Hallow concrete block and CSEB producer, stone cutting enterprises, sand extractors,

timber treatment /furniture enterprises, transporters, mini and micro contractors, and Grill

enterprises are 149 (7%), 13 (1%), 54 (3%), 43 (7%), 4 (<1%), 22 (1%), 169 (8%), 773 (36%),

784 (37%), and 108 (5%) respectively in Nuwakot district. (For more details, please see the

Annex-XII)

3.4 Development of Markets in Dhading District

Dhading besi is the head-quarter of Dhading district. Similar to Nuwakot district, construction

market is highly concentrated on headquarter market area and river bank of Trishuli River along

the Prithvi Highway. Trishuli River in Dhading district crosses four rural municipalities-

Benighat Rorang, Gajuri, Siddhalek and Galchhi, while the Prithvi Highway in Dhading district

Hardware enterprises

7%

Crushers1% Brick Kilns

3%

Hallow Concrete Block (HCB) and CSEB producers

2%

Stone Cutting enterprises

0%

Sand extractor 1%

Timber treatment/furniture

enterprises8%

Transporters36%

Mini and Micro Contractors

37%

Grill5%

Estimated MSMEs in nuwakot district

Figure 1: Estimated MSMEs in Nuwakot district

21

crosses five municipalities, i.e., one additional rural municipality (Thakre municipality) in

addition to those of 4 rural municipalities that are passed by the Prithvi Highway.

The highway also locates MSMEs which supply locally produced as well as imported

construction materials. Some local items such as bricks from the local kilns are produced in a

few municipality areas of Dhading district, such as Dhunibesi Municipality. Locally produced

construction materials are available at the bank of Trishuli River. The more we move towards

Kathmandu valley the more concentration of locally produced materials in Dhading district.

However, import based construction materials are available at the headquarter city- Dhadingbesi

(Nilkanth Urban Municipality) and around the Prithvi Highway. The closer we move towards

Kathmandu valley, we observe a large number of sand processors and crushers located around

the bank of Trishuli River.

The data reveals that headquarter of the Dhading district- Nilkantha Urban Municipality (557) as

well as Dhunibesi Urban Municipality (border of the Kathmandu valley) (629) have a large

number of MSMEs in comparison to the MSMEs located in other rural municipalities. Benighat

Rorang Rural Municipality have a large number of MSMEs as compared to the MSMEs in

Gajuri Rural Municipalities.

Figure 2: District map, rivers, and roads passes in Dhading district

22

The list of MSMEs which were registered at the District Office of Small and Cottage reveals that 89 small

enterprises are working in the field of Dhunibesi municipality5. Benighat Rorang, Gajuri, and Siddhalek

municipalities have 47, 111, and 15 MSMEs respectively. The list does not incorporate the number of

hardware enterprises, mini and micro contractor, and the transporters working in the survey areas.

Enterprises Dhunibesi Benighat Rorang Nilkantha Gajuri

Hardware enterprises 16 15 28 7

Crushers 4 1 1 8

Brick Kilns 38 1 11 2

Hallow Concrete Block (HCB) and

CSEB producers 4 6 24 7

Stone Cutting enterprises 3 2 0 3

Sand extractor 4 6 28 8 Timber treatment/furniture

enterprises 0 0 61 13

Transporters 346 7 136 84

Mini and Micro Contractors 186 299 237 167 Grill 28 16 31 13

Total MSMEs 629 353 557 312

Source: Ward Chairpersons of the respective municipalities in Dhading district, July 2018

5 The hardware enterprises could be identified by the name they have as such in the register, while the mini and micro enterpri ses are not

registered and the limited transporters are registered at the District Small and Cottage Office.

16

4

38

4

3

4

0

346

186

28

15

1

1

6

2

6

0

7

299

16

28

1

11

24

0

28

61

136

237

31

78

2

7

3

8

13

84

167

13

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Crushers

Brick Kilns



Sand extractor

Timber treatment/furniture enterprises

Transporters


Grill

MSMEs in construction market in selected municipalities in Dhading district

Dhunibesi Benighat Rorang Nilkantha Gajuri

Figure 3: MSMEs in construction market in selected municipalities

in Dhading district

Table 4 Different enterprises present in Dhading District

23

There is a gap between those of registered MSMEs at the District Office of Small and Cottage

and data collected through the source of ward chairpersons. (For more details, please see the

Annex-XIII)

3.5 Estimated Number of Small Enterprises of Construction Market in Dhading

District

In Dhading district, the estimate of MSMEs show that number Hardware enterprises, Crushers,

Brick Kilns and suppliers, Hallow concrete block and CSEB producer, stone cutting enterprises,

sand extractors, timber treatment /furniture, transporters, mini and micro contractors, and Grill

enterprises are 118 , 19, 54, 48, 11, 54, 178, 776, 2110, and 101 respectively. Of these MSMEs,

transporters cover 50 percent followed by 13 percent mini and micro contractors, 11 percent

furniture/ timber treatment enterprises, 8 percent hardware enterprises, etc. (For more details,

please see the Annex-XII)

3.6 MSME Registration

The MSMEs registration process generally takes place at the District´s Small and Medium

Enterprise (SME) Office, a line agency of Ministry of Industry (MoI). In addition, registration

processes are being started at municipality level. For the purpose of tax, MSMEs are also

registered at the district line agency of the Inland Revenue Department.

A questionnaire survey was administered to report on the registration status of micro and small

enterprises of construction sector in Nuwakot and Dhading districts. The survey respondents

include hardware enterprises, crushers, brick suppliers/ Kilns, CSEB/HCB producers, stone


8%

Crushers1%

Brick Kilns4%


3% Stone Cutting enterprises

1%

Sand extractor 3%

Timber treatment/furniture

enterprises11%

Transporters50%


13%

Grill6%

Total MSMEs in Dhading district

Figure 4: Total MSMEs in Dhading district

24

cutters, sand extractor, furniture, transporter, contractor, and metal worker/griller. Almost of the

entrepreneurs engaged in construction sectors, for example, are registered at their concerned

local or national regulatory agencies. However, almost all of small contractors and very few

hardware and furniture enterprises are supplying their services/outputs without registering their

business. Those insignificant hardware and furniture enterprises which are not registered are

mostly located in the rural and semi-rural area. There are some MSMEs which are not registered

anywhere are supplying construction goods and services. Those enterprises which are supplying

goods without registration are mostly the small and mini contractors and transporters (at the local

level) in addition to the brick suppliers. On the other, there are also some MSMEs which are not

supplying the construction goods and service though they have been registered at the SME office

in the districts.

Most of the respondents have registered their business in the government authority. However, few

respondents from metal and furniture enterprises and most of the respondents from contractors are not

registered in Nuwakot and Dhading districts.

3.7 Source of Investment for MSMEs in Construction Market Respondents were asked to inform about the source of capital for investment on their business. Half of the

respondents (50%) reported that they used their old savings. This was followed by those respondents who

sourced through the Bank and Financial Institutions including the cooperatives (30%), neighbors, friends

and relatives (13%), business income of the entrepreneur (4%), and others (3%).

30

2

7

8

1

6

23

9

1

14

0

0

1

0

0

0

3

0

8

3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Hardware enterprise

Crushers

Brick suppliers/ Kilns

CSEB/HCB

Stone cutter

sand extractor

Furniture

Transporter

Contractors

Metal

Number of registered and non-registered business

Yes No

Figure 5: Number of registered and non-registered business

25

Respondents who used old saving for busfiness were more in rural area in comparison to urban

area.

20

1

7

4

0

6

22

8

7

12

3

0

1

1

0

0

11

1

0

5

17

1

3

6

1

1

9

6

0

8

3

0

0

0

0

1

1

0

1

2

2

1

0

0

0

2

0

0

0

1

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Hardware enterprise

crushers


CSEB/HCB

Stone cutter

Sand extractor

Furniture

Transporter

Contractors

Metal

Source of loan for business establishment by business

Old Saving Neighbours and Friends Loan from Bank, Finance and cooperative Business Income Other

4

11

23

12

2

6

3

18

1

7

0

4

8

3

1

3

0

2

0

1

3

4

19

4

0

5

2

9

0

6

0

0

7

0

0

0

0

0

0

1

1

0

1

1

0

1

1

0

1

0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Belkotgadhi Municipality

Benighat Rorang

Bidur Municipality

Dhunubesi Municipality

Dupcheshowor Rural Municipality

Gajuri Rural Municipality

Likhu Rural Municipality

Nilkhantha Municipality

Siddhalekh Rural Municipality

Tadi Rural Municipality

Source of loan for business establishment by municipality

Old Saving Neighbours and Friends Loan from Bank, Finance and cooperative Business Income Other

Figure 6: Source of loan for business establishment by business

Figure 7: Source of loan for business establishment by municipality

26

CHAPTER FOUR

FINANCIAL REQUIREMENTS AND ITS ARRANGEMENT

The presence of the bank and financial institutions have a good coverage around the head quarter

cities and in the few developed areas of the districts (For more details, please see the Annex- A).

Equally there are a few rural municipalities which still have low access of financial resources for

the MSMEs. Study team found the limited access of the resources to MSMEs even with presence

of all categories BFIs- A, B, C, and D including the cooperatives. Most of those BFIs which are

providing resources are serving loans to MSMEs as a consumer basis but in the form of business

entity (For more details, please see the Annex-XIV). The interest rate charged for business entity

in the Nepali banking industry is relatively smaller while it goes higher for consumer. Actually,

rate of interest charged are based on the base rate plus premium value. The base rate covers

overall operational cost of BFIs and the premium is additionally added which is usually based on

the sectors of credit flow, associated risk, return on equity, collateral positions, etc. The presence

of informal market for access of credit such as friends, neighbors, relatives are also found

equally important source of fund for MSMEs. The proportion of these informal loans is still

higher among the MSMEs in the districts. Issues are found on availability of collaterals, cost of

capital, business and financial education, credit market infrastructures, development of physical

infrastructures, etc.

4.1 Willingness to Expand Business

21

1

8

6

1

5

22

6

9

16

9

1

0

2

0

1

4

3

0

1

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Hardware enterprise

crushers


CSEB/HCB

Stone cutter

sand extractor

furniture

transporter

contractors

Metal

Willingness in Business expansion in near future

Yes No

Figure 8: Business expansion in near future, by business

27

Respondents were asked to inform their willingness to expand business in near future. A very

high majority of the survey respondents reported that they wish to expand their business. Eighty

two percent respondents desired to expand their business while 18 percent did not have such

wishes. Of those who were willing to their business were stone cutter and brick suppliers

(100%), furniture enterprises (84%), non-registered contractors (67%), etc. On the other those

who denied expanding their business in near future were crushers (50%), transporter (37%),

hardware enterprises (30%), CSEB/HCB producers (25%), etc.

Respondents who were from rural local market centers would like to expand their business in

comparison to those who were from semi-urban or headquarters area of the district.

4.2 Utilization of Fund to Expand Business

Respondent MSMEs reported that they were interested in utilizing the fund for purchasing of

land to manage their working space. In addition respondents were also interested in procuring

necessary materials, steels, Tayal, machinery and equipment, new transports, increase the stock

of goods and services, build show room for display, develop new pillar boxes, warehouse

management, etc. for business expansion.

4.3 Availability of Capital to Expand Business

Respondents were asked to inform on the availability of capital to expand business in near future.

An overwhelming proportion of respondent reported that they didn´t have their own capital to

expand their business. Those respondents who did not have their own capital were more in rural

area in comparison to the urban and semi-urban area. Most of the questionnaire survey respondents

did not have their own capital to invest in for their business expansions.

4

12

29

11

2

7

4

17

1

8

1

1

6

3

0

3

0

4

0

3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Benighat Rorang

Bidur Municipality








Business expansion in near future in municipality

Yes No

Figure 9: Business expansion in near future in municipality

28

4.4 Source of Capital to Expand Business

Respondents were asked to report possible fund suppliers for their business expansion. Most of

the respondents (90.5%) reported that they shall be taking loan from BFIs and cooperatives while

expanding their business in near future. Respondents who have planned to take loan from

neighbors, friends, and family to expand their business are very low (5%). (Figure 13)

0

0

2

0

0

0

0

1

0

0

4

12

27

11

2 7 4

16

18

0

5

10

15

20

25

30

0 0.5 1 1.5 2 2.5


Benighat Rorang

Bidur Municipality


Dupcheshowor Rural…






Own capital to expand business Yes No

1

0

0

0

0

1

0

1

0

0

20

1

8

6

1

4

22

5

9

16

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Hardware enterprise

Crushers


CSEB/HCB

Stone cutter

sand extractor

Furniture

Transporter

Contractors

Metal

Own capital to expand business by enterprises

Yes No

Figure 10: Own capital to expand business

Figure 11: Own capital to expand business by enterprises

29

Respondents who intended to use their own old saving while expanding their business were 22

percent only (Figure 14).

4.5 Problems in the Source of Loan

Respondents were asked to view the problems close to the source of capital while they are going

to expand their business. 27 percent respondents reported that the interest rate is high, while 16

3

11

26

11

2

7

3

15

0

8

1

1

3

0

0

0

1

2

1

0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Benighat Rorang

Bidur Municipality








BFIs source of loan for business expansion in near future

Loan from Bank, Finance and Cooperative Yes Loan from Bank, Finance and Cooperative No

1

3

5

4

0

1

1

3

0

3

3

9

24

7

2

6

3

14

1

5

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Benighat Rorang

Bidur Municipality








Old saving as a source of loan for business expansion in near future

Yes No

Figure 12: BFIs source of loan for business expansion in near future

Figure 13: Old saving as a source of loan for business expansion in near future

30

percent, 15 percent, 11 percent and 5 percent respondents reported that they had difficulty to pay

the high interest rate, no reliable source of loan, difficult to pay loan installment, and cost of loan

processing respectively. One fourth of the respondents (25%) reported that they had other

problems (Figure 15).

While delving deep into the root causes, study team observed several challenges in access to finance for

MSMEs, especially for those MSMEs who were from rural municipalities. Actually the challenges were

found in the supply as well demand side of the loanable funds. The supply side challenges in summary

30

22

00

41

73

30

40

12

53

23

20

12

113

23

1

10

20

01

21

00

130

43

13

83

13

90

22

01

111

27

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Hardware enterprise


Stone cutter

Furniture

Contractors

Problems in the source of loan

No relaiable source of loan Difficult to pay interest Difficult to pay installment

Cost of loan processing High interest rate Others

1

3

7

2

1

0

0

3

0

5

0

4

5

3

0

2

0

4

0

5

1

3

1

1

0

3

1

4

0

2

0

0

0

3

0

1

1

1

0

1

0

5

12

7

0

5

0

9

0

1

3

5

9

3

0

2

2

8

1

2

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Benighat Rorang

Bidur Municipality








Problems in the source of loan

No reliable source Difficult to pay interest Difficult to pay installments

Cost of loan processing High interest rate Others

Figure 14: Problems in the source of loan

Figure 15: Problems in the source of loan

31

are: (a) increase the proportion of MSME business loan, (b) decrease the lengthy procedures of lending

and documentation, (c) include rural social assets in risk mitigation measures- scoring matrix of BFIs, (d)

enlarge the scope of assets in the list of collaterals, (e) reduce the cost of credit information among SMEs,

(f) educate MSMEs on business development plan and strategies. On the other, the demand side

challenges in summary are: (a) increase the payment capacity of MSMEs, (b) reform the credit transaction

practice, (c) reduce the cost related to the business registration, audit reports and tax compliance (d)

reduce the cut throat competition among MSMEs, (e) establish credit market infrastructures, (f) habituate

MSMEs on market system and credit market information, (g) develop the local level physical


The presence of the BFIs were largely concentrated in the urban area. Commercial banks which

have a large proportion funding resources were found with limited interest in small size loans

(NRs. 1 million threshold) because of higher operational cost. The presence of development bank

and finance companies are limited even in the urban area of the study districts. The number of

cooperatives in the rural areas is high but they remain closed due to no regular staffs in majority

cases and were found with limited loanable funds. These cooperatives usually flow loan of very

small size (mainly NRs. 25,000- 300,00.00) which in many extend do not cover the demand for

construction MSMEs.

4.6 Required Size of Capital for Business Expansion

34.48

20.69

10.34

17.24

17.24

44.12

20.59

8.82

17.65

8.82

200,000-1000,000

1100,000-2000,0000

2100,000-4000,000

4100,000-10,000,000

10,100,000- 10,500,000

Average size of loan demand for MSMEs in rural and urban municipalities (%)

Rural Municipality Urban Municipality

Table 5: Loan capital requirements for MSMEs to expand business

NRs. Frequency Percent

2 to 4 hundred thousands 4 4.2




Above 10 hundred thousands 73 76.8

Total 95 100.0

Figure 16: Average size of loan demand for MSMEs in rural and urban municipalities

32

A large proportion of the respondents (77%) reported that additional loan capital requirements for them is

more than 10 lakhs, while 13 percent respondents reported that they require about 6 lakhs loan, and 10

percent respondents reported that they are in need of 6-10 lakhs for expanding their business in near

future.

However, majority of the respondents demanded for a loan size in the range between NRs. 1- 2 million.

The credit requirements vary in between the nature of MSMEs in the districts, their family background,

city they belong to, size of business they handle, and so on. Those who are from urban areas have demand

of larger size credit compared to the MSMEs from rural areas.

33

CHAPTER FIVE

CONSTRAINTS OF MSMEs

The study team during the questionnaires survey asked them to put forth about their problems.

The responses were collected under the following headings about the MSMEs.

Industry: There are some policy issues about construction materials. For examples, judiciary

and district administration office have conflicting statements - they have supported and ruled

against extraction of sands and concrete from the rivers. The barriers are mainly in the quality of

the construction materials, transportation system, price fluctuation of raw materials, local

material scarcity, etc. The government has not proper supportive policies for MSMEs in the

development of construction market. The cost of transportation is very high due to the difficult

muddy roads and lack of road networks. The labor market is in problem mainly due to the

shortage, dominance of unskilled and semi-skilled labors since they were available only for

seasonal periods. MSMEs have problems of liquidity as most transactions were on credit basis.

They recently have faced problems of high tax. There are problems occurred in time and again

such as inconsistent supply of electricity, lack of raw materials, poor governance, unsupportive

behavior of law enforcement personnel, forest office (for not letting allow to chop down the

trees) and district administration, difficulties of road connectivity, market practices of the

MSMEs, shortages of goods and services, collaterals for access to credit, low education and

technical idea on business proposal development, limited market opportunities etc.

Hardware: In lack of proper regular income of the consumers, entrepreneurs are compelled to

practice of selling goods and services on credit. As a result, lack of cash liquidity complex

relation with dealers and whole sellers. The competition among the enterprises in the local

market is increasing. Increase in company price for the imported products led to rise in local

retail price of goods in the market. However, consumers complained on the rising price of

construction materials. Therefore, it is difficult to sale construction goods and services due to the

high price. Internally, Hardware MSMEs also have problems of staffs (unavailability) and local

level transportations. MSMEs also feel that government officials have not rightly monitored for

market reform. With the unavailability of construction goods and service for months in a year,

lack of sufficient space for investment due to the limited opportunity in the local market, the

MSMEs expansion has been stagnated. Problems are also in the approach of banking valuation

while taking loan from BFIs. Due to the transportation problems, goods arrive was very untimely

in local market. Due to this, hardware MSMEs have been unable to meet the demands for goods

and services in the rural area. They blame on the government policies and employees for taking

charge of under invoices during the import and export of goods and demand transparent

monitoring by the government officials.

34

Brick suppliers / Kilns: The market is growing more competitive due to the large level of

suppliers in the local market. Suppliers are selling bricks as per manufacturer´s cost and they are

not even taking the marketing cost. The land for rent is going to be very expensive. They have

used more unskilled or semi-skilled labors. Brick suppliers have taken high loan from the bank

and financial institutions. As a result, brick suppliers are not being able to invest more in

business. Some of the brick suppliers are not registered. Situations like increase in cost due to

broken bricks and seasonality demand in the market have led the bricks suppliers difficult to

sustain in the market.

Halo concrete block and CSEB producers: These producers sale goods on credit and they

delay payment had restricted further investment. As a result, they have problems to capitalize the

resources. Also high price of raw materials made difficulty in the smooth sales. The banking

service for taking loan has a very lengthy process. There is a lack of skilled labors. The demand

for these goods and services is small.

Transporters/ suppliers: The transporters have a seasonal market supply. The problems are

created by the police administration and their bad governance. In addition, local road network is

very poor to move on the roads to supply of goods in the rural areas. Also, credit transaction in

local market has made the entrepreneurs shortage of liquidity, eventually having negative impact

on the expansion of the service. The cost of capital is high due to the high interest rate. The

suppliers also feel a lengthy banking process for taking loan even to the SMEs. In case of vehicle

accident, they face problems from public people and feel difficulty (far distance) to reach at the

local hospitals. Suppliers are facing problems in getting back the credit receivable amount from

the market and the transactions are also very low due to seasonality market. Also, they think that

VAT has increased expense cost. The vehicle servicing and maintenance are also difficult in the

districts. Moreover, they face a tough competition among suppliers depending upon the seasonal

variations. The shortage of raw materials and blockages of roads by the various groups is also the

problems for transporters. The transporters also face difficulty in securing their vehicles as there

is limited space available for parking.

Mini and small contractors: Most of the mini and small contractors are Madeshi communities

and they feel that biased and discriminatory behavior by some members of the community have

made difficult to work. They are not legally registered but they are taking contract for

constructing their homes. They have low capacity of investment to expand their business. Also,

they don’t have collateral in most of the cases. They have to pay a high proportion of revenue for

labor costs. They feel difficulty and expensive registration process. They also suffer from the

poor roads networks, seasonal working of the labors, and problems in the supply of raw

materials.

Furniture/Timber treatment enterprises: They lack proper space for managing their raw

materials and products. They also face problems in getting loan from bank as it was difficult to

secure loan as per the size of their demands. They also sell goods on credit. Sometimes woods

35

(raw materials) are damaged by termites and other insects. Because of seasonality and low

annual transaction, they do not feel necessary in registering their enterprises on the Office of the

Company Registrar. They are facing shortage of skilled and semi-skilled labor, and raw

materials. The raw materials they use to produce outputs are becoming costly and it makes

difficulty to compete among other suppliers in lack of proper stock. They also have credit

transaction problems. They don’t have sufficient stock of money to invest in their business. They

have dissatisfaction with government institutions regarding the registration and other issues.

They are facing difficulties to import woods from other districts because of irregularities by the

governing bodies.

Sand extractors: They have policy level difficulty of extract sand. Problems are sometimes

created by government administration. The market sometimes has lack of raw materials.

Government complicated policies and illegal extraction and distribution of sands in the market

has created further problems for Sand extractors.

Crushers: Policy issues are at the regulatory levels. Local governments are being unable to take

right decision to support on the reconstruction process.

We are regulating locally produced construction materials. A large number of suppliers are involved in

extracting the construction materials even without registration and paying any tax to the local government.

Now, there is only one registered entrepreneur producing crushers required at the local level and paying

royalty of concrete materials. Now we have to energize to such construction material producers for the

support of constructing homes for the earthquake victims.

Construction materials are not extracted during these 3 rainy months, Ashad to Bhadra. There used to be

problems from district level government structures on supply of construction materials. When new CDO and

Police heads are come into the position, problems appear in the supply. Now we have settled these issues

and problems have been solved in district. There are several small level suppliers to whom we are not

regulating to those who do not use machinery and equipment to extracting sands and concrete materials

from rivers. They are small holders and marginalized community people who need supports. We see

shortages of raw materials in time and again. – Chairperson, Construction Regulation Committee, Bidur

Municipality (Ward Chairperson), Ward No. 4

36

CHAPTER SIX

CONCLUSION AND RECOMMENDATIONS

6.1 Conclusion The current reconstruction process is lagging behind due the market supply gap of construction

sectors actors and problems in their services in Nuwakot and Dhading districts. Specifically in

rural municipalities, supply constraints are observed on the supply of construction materials. The

barriers that limit on the supply of construction materials and related services are not only due to

the topographical difficulties but also on the market based incentives in lack of support from

government institutions and private sectors.

The presence of construction based MSMEs are highly concentrated around the headquarter

cities and major roads around the rivers, while the presence of these MSMEs is very poor in the

rural hilly area in the districts. The presence of construction based MSMEs are therefore largely

affected by government structures in the districts and rivers flow which provides the local raw

materials, and development of roads. The study team projected 2119 and 3469 number of

MSMEs in the construction sector in Nuwakot and Dhading districts respectively. The

disintegrated data showed MSMEs working are Hardware enterprises (7%), Crushers (<1%),

Brick Kilns/suppliers (3%), Hallow Concrete Block (HCB) and CSEB producers (2%), Stone

cutting Enterprises (<1%), Sand Extractors (1%), Timber Treatment/Furniture enterprises (8%),

Transporters (37%), Mini-contractors (37%), Metal/Grill Enterprises (5%) in Nuwakot District.

Similarly, the proportion of Hardware enterprises (3%) , Crushers (<1%), Brick Kilns/suppliers

(1%), Hallow Concrete Block (HCB) and CSEB producers (1%), Stone cutting

Enterprises(<1%), Sand Extractors(2%), Timber Treatment/Furniture enterprises(5%),

Transporters (22%), Mini-contractors (61%), and Metal/Grill Enterprises (3%) among MSMEs

in Dhading District. Of these MSMEs, a large presence of mini contractors who are not legally

registered is very high due to the informal parts of the construction market. Of these enterprises

which sourced their old saving for their business establishment were almost 50 percent.

The outreach of BFIs and Cooperatives is very good in headquarter cities followed by a good

presence on road access area and poor presence in the rural area. An overwhelming proportion of

MSMEs respondents (82%) from the survey area reported that they wish to expand their

business. However, they did not have as much funds of their own to invest in their business. Of

those who had the wish to expand their business were almost in need of the financial

requirements. Moreover, those entrepreneurs desiring of business expansion have a plan to take

loan from BFIs and Cooperatives sources (90.5%). However, MSMEs see problems such as high

interest rate (27% respondents), difficult to pay interest rate and installments, etc. in their

possible loans sources. A very high majority of the respondents (77%) reported that they had a

demand for more than NRs. 1 million to expand their business, while 13 percent and 10 percent

respondents had in demand for less than NRs. 0.6 million and NRs. 0.6-1.0 million. The average

37

size of loan demand per entrepreneur is NRs. 7,031,522. On the supply side, majority BFIs have

SMEs or similar types of product to flow out the loan. But they are not being able to flow loan to

MSMEs due to the problems such as high cost of capital, insufficient source of income,

inadequacy of collaterals, low financial literacy and business management, lack of proper

business plans, etc. Overall BFIs are flowing out limited consumer loan to BFIs of business loan.

Challenges on access to finance for MSMEs are in the supply as well demand side of the

loanable funds. The supply side challenges are: (a) increase the proportion of MSME business

loan, (b) decrease the lengthy procedures of lending and documentation, (c) include rural social

assets in the risk mitigation measures- scoring matrix of BFIs, (d) enlarge the scope of assets in

the list of collaterals, (e) reduce the cost of credit information among MSMEs, (f) educate

MSMEs on business development plan and strategies. On the other, the demand side challenges

are: (a) increase the payment capacity of MSMEs, (b) reform in the credit transaction, (c) reduce

the cost related to the business registration, audit reports and tax compliance (d) reduce the cut

throat competition among MSMEs, (e) establish the credit market infrastructures, (f) habituate

MSMEs on business and credit market information, (g) develop the local level physical


The MSMEs barriers in the districts are in policy and operational levels. The locally produced

materials are in need of the clear policy supports for the extraction of construction materials and

the imposition of tax for those materials. In terms of determining prices and giving permission to

the enterprises for extraction of these locally produced materials, bad governance issues are

inter-related with district administration, police administration, and local government. Almost

enterprises have problems on the under-developed physical infrastructures, towards the credit

crunch position, requirement of funds to expand their business, and labor shortage issues. The

internal issues of the MSMEs such as poor level business education and lack of creative

competency, adequate financial literacy to prepare for business proposal to ask for MSMEs loan

in their requirements, shortages of raw materials, stock management and seasonal supply of the

materials, etc.

6.2 Recommendations Based on key findings, following policy and operational recommendations are suggested:

(a) Recommendations for construction market development: Market supply gap on

construction materials should be filled in support of government entities. Government

and other authoritative bodies should provide subsidies to construction based MSMEs to

expand the construction market. For this, policies should be amended accordingly on the

relevant requirements of MSMEs. There is a frequent problems of high price and

monopoly power exerted by the few suppliers working on the sand and concrete pebbles.

The locally produced materials have to be extracted in such a balance that reconstruction

as well as local construction will have an adequate balance in materials supply along with

the protection of environment. Governments should have a balanced tax and royalty

38

approach to address the local demand and for utilization of locally produced materials.

Governance reform can be the better practice for the supply of local needs. Those

enterprises which provide service at the local level should also be locally

registered/informed. The registration of micro and mini contractors is registered at the

local governments. The registration of transporters at the local level is also important.

Local governments have to reduce the cost of registration by the minimum possible

compliances and procedurals. Local level development affects positively on construction

market. Therefore governments with no alternatives should have a plan of physical

infrastructure development such as roads, electricity, communication, etc. to address the

constraints of the rural area through the private sector. MSMEs have some institutional

problems such as low level of education, business expansion. Governments have to

address these problems through a broad based and inclusive market development

approach.

(b) Recommendations on access to finance: Government bodies should plan incentives to

establish new BFIs branches in rural areas. BFIs branches should focus SME loan to

expand at the maximum possible level. The supply side reforms should be: (a) increase

the proportion of MSME business loan, (b) adopt digital technologies such as cloud

computing, distributed ledger technology, artificial intelligence that can reduce the

transaction cost of BFIs significantly, (c) decrease the lengthy procedures of lending and

documentation, (d) include rural social aspects in the risk mitigation measures- scoring

matrix of BFIs, (e) enlarge the scope of assets in the list of collaterals, (f) reduce the cost

of credit information among MSMEs, (g) educate MSMEs on business development plan

and strategies. On the other, the demand side recommendations are: (a) increase the

payment capacity of MSMEs, (b) reform in the practices of credit transaction of MSMEs,

(c) reduce the cost related to the business registration, audit reports and tax compliance

(d) reduce the cut throat competition among MSMEs, (e) establish the credit market

infrastructures, (f) habituate MSMEs on business and credit market information, (g)

develop the local level physical infrastructures of development, etc.

39

Annex –I: Situation Analysis of Sample Municipalities and Market Area in Dhading

Types of

variable

Situation of the infrastructures and business environment

Nilkantha Municipality Siddhalek

Municipality

Benighat

Rorang

Municipality

Gajuri

Municipality

Dhunibesi Municipality

Major

market

Places

Ward No 3 and wards

touching Kathmandu way in

roadside

Benighat, Majhimtaar,

Malekhu, Charaudi

and road lines wards –

5, 7, 8,9, 10, and 13

Dependent to

Nilkanth,

Malekhu and

Gajuri

Road line

wards – 1, 2,

4, 6,8

Road line wards –1, 2, 5, 6

(Around 15 Kilometers of

highway)

Road

development

Moderate quality black

topped road only on ward

No.3, major market area and

way to Kathmandu. 3 roads

(which are totally closed in

rainy season for vehicles)

also connect to rural hilly

area

1 highway

(Kathmandu to

Mugling/ Chitwan/

pokhara) and rural

hilly and difficult

roads

1 highway

(Kathmandu

to Mugling/

Chitwan/

pokhara) and

rural hilly and

difficult roads

1 highway

(Kathmandu

to Mugling/

Chitwan/

pokhara) and

rural hilly and

difficult roads

1 highway

(Kathmandu to Mugling/

Chitwan/ pokhara) and

rural hilly and difficult

roads

Population

flow

Flown from rural hilly areas flowing out to

Dhadingbesi and

Kathmandu

flowing out to

Kathmandu

flowing out to

Kathmandu

Insignificant

Presence of

BFIs

ABCD category &

cooperatives

Only one branch office

is being established

Very few

branch offices

Few branch

offices

Few in limited wards along

the highway

Electricity

supply

Yes, but power cutting

experience observed by

MSMEs

Yes but limited to road

areas

Yes but

effective in

road areas

but effective

in road areas

but effective in road areas

Rivers

Trishuli River (Benighat

Rorang, Gajuri, Galchhi, and

Thakre rural municipalities)

alongside of the Highway

Trishuli River passes

nearby

Trishuli River

passes

Trishuli River

passes

Trishuli River passes

Trade

linkages and

Kathmandu, Highway and

rural area

Kathmandu,

Dhadingbesi and

Kathmandu

and limited

Kathmandu

and limited

Kathmandu and limited

rural area

40

Market

connectivity

limited rural area rural area rural area

Labor market

situation

Migrated labor More migrated labor

and few local labor

More migrated labor and

few local labor

Topography

Hilly area except Ward No.

3

Most of the part is

hilly, besides few road

and riverside area

Hilly area

except the

road line area

Hilly area

except the

road line area

All wards are hilly

Urban

development

prospects

Yes, but limited land supply Major road area only Highway

Road area

Highway

Road area

Highway Road area

Development

plan

periodic plan, Local

government

Not available Not available Not available Not available

MSME plan National plan National plan National plan National plan National plan

41

Annex – II: Situation Analysis of Sample Municipalities and Market Area in Nuwakot

Types of

variable

Situation of the infrastructures and business environment

Bidur Market Area Belkotgadhi

Market Area

Tadi Market

Area

Likhu Market

Area

Dupcheswor

Market Area

Major market

Places

Roadside Wards: 1, 2, 3,4 Roadside Wards:

7, 8, 9, 10

Roadside

Wards: 3, 4

Roadside

Wards: 6, 4

Road

development

Narrow, black topped but poorly

developed roads in market place. 5 roads

(to Tarkeswor, Tadi/likhu,

Kakani/Tokha, Kolani/Deurali,

Betrawati/Meghang) passes to rural

municipalities area. Most of these roads

are underdeveloped though black

topped. Three roads to connect to

Kathmandu (Kathmandu-Galchhi-Bidur-

Dhunche, Bidur- Dhikure-Chhahare-

Kathmandu, Bidur- Kakani-

Kathmandu).

2 major roads

passes through it

(connects

Kathmandu from

Kakani and

Dhading from

Galchhi)

Mixed of black

topped and

gravel roads to

connect from

district

Headquarter

Mixed of black

topped and

gravel roads to

connect from

district

Headquarter

Difficult in

access of road

networks to all

wards

Population

flow

Flew in from rural hilly areas flowing out to

Kathmandu and

downside roads

flowing out flowing out flowing out

Presence of

BFIs

ABCD category & cooperatives Limited in road

those 2 major

road sides

Very limited

presence

Very limited

presence

Few in limited

wards

Electricity

supply

Yes, but power shedding exist Limited along the

road sides

Limited along

the road sides

Limited along

the road sides

Not access to

all wards

Rivers

Passes along road

side

Passes nearby Passes nearby

Trade linkages

and Market

connectivity

Kathmandu and rural markets from the

district

Limited rural area

and Kathmandu

and Dhading

Limited rural

area and

Kathmandu

Limited rural

area and

Kathmandu

Tadi and Bidur

Labor market More migrated labor and few local labor More migrated Mix of migrated Mix of migrated Mix of

42

situation labor and few

local labor

labor and local

labor

labor and local

labor

migrated labor

and local labor

Topography

Hills with limited plain land Most of the part is

hilly, besides few

road and riverside

area

Mostly hilly,

besides road

and riverside

area

Mostly hilly,

besides road

and riverside

area

All wards are

hilly

Urban

development

prospects

Yes, but limited land supply Ward No 7,8,9

and 10 that passes

Tadi river and

major road

Road and

riverside area

Road and

riverside area

Limited in

ward 4, 6, 7

(Samundratar

Shikharbesi)

Development

plan

5 year´s periodic plan, Local

government

Not available Not available Not available Not available

MSME plan National plan National plan National plan National plan National plan

43

Annex – III: Data Collection Format in Municipality and District

Types of Enterprises

No. of MSMEs in Wards, ………………………………, Municipality

1 2 3 4 5 6 7 8 9 10 11 12 13


Crushers

Brick Kilns



Sand extractor

Timber treatment enterprises

Transporters


Types of Enterprises

Number of MSMEs in ……………………….. District


Crushers

Brick Kilns



Sand extractor


Transporters


44

Annex – IV: Area of Data Collection and Respondents in Districts - Ward chairpersons, municipalities of Dhading and Nuwakot

- MSMEs working in the various area of construction market

- Rural/Urban Municipality Offices

- Association of Contractor, District Chapter

- FNCCI and FNCSI Office, District Chapter

- Association Office of MSMEs

- Office of the District Coordination Committee

- Small and Cottage Office, Districts

- Construction Supply Regulation Committee, Bidur Municipality

- Bank and financial institutions (BFIs) and Cooperatives

45

Annex – V: Sample Respondents in Districts

District

Sample Size of the Questionnaire Survey Total

Samples Remarks Urban Market Area

(municipality)

Rural Market Area (municipality)

Nuwakot Bidur Belkotgadhi Tadi Likhu Dupcheswor

Hardware enterprises 10 0 1 1 1 13

Crushers 0 1 0 1 0 2

Brick suppliers/ Kilns 3 1 1 0 0 5


3 2 0 0 0 5 Construction

material

producers/suppliers Stone Cutting enterprises 0 0 0 0 0 0

Sand extractor 2 0 0 0 0 2


7 1 2 2 1 13

Transporters 0 0 3 0 0 3

Mini and Micro Contractors 2 0 3 0 0 5

Metal Enterprises 8 0 1 0 0 9

Total 35 5 11 4 2 57

Dhading Nilkantha Dhunibesi Sidhhalek Benighat Gajuri

Hardware enterprises 7 4 2 5 1 19

Crushers 0 0 1 0 0 1

Brick Kilns 0 3 1 0 0 4

HCB and CSEB Producers 1 1 1 0 1 4 Construction

material

producers/suppliers Stone Cutting enterprises 0 0 1 0 1 2

Sand extractor 1 0 1 0 3 5

Timber treatment

enterprises 4 3

1 4 2

14

Transporters 4 0 1 1 1 7

Mini and Micro Contractors 1 1 1 1 0 4

Metal Enterprises 3 2 1 2 1 9

Total 21 14 11 13 10 69

46

Annex VI: Quick Survey Questionnaire for Supply Side Actors

;fgf, demf}nf tyf n3' pBdLsf nflu ;f]lwg] k|Zgkq

A pQ/bftf;+usf] cg'dlt kq

lk|o pQ/bftf,

g]kfndf e"sDk kl5sf] k'g{nfesf nflu cGt/fl{ \i6«o ljsf; ljefu o"s]sf] cfly{s ;xof]udf ;+rflnt kl/of]hgfsf] nflu lgdf{0f If]qsf]

af/]df yk hfgfsf/L lngsf nflu tkfO{+nfO{ नेपाल बिकास अनुसन्धान प्रतिस्थानof] cWoogdf ;xeflu u/fpg rfxG5f}+ . lgdf{0f jhf/

k|0ffnLnfO{ Joal:yt ug{ s;/L ;lsG5 eGg] s'/f yfxf kfpg of] cWoog dxTjk"0f{ 5 . o; cWoogdf ;xeflutfsf nflu nueu !)—!%

ldg]6 hlt ;do nfUg]5 . ;e]{stf{n] tkfO{+n] lbPsf k|To]s k|Zgsf] pQ/x?sf] /]s8{ klg ug{ ;Sg]5g eGg] s'/fsf] oxfFnfO{ hfgfsf/L

u/fpb} tkfO{+n] lbg'ePsf pQ/x?sf] /]s8{ uf]Kotfsf ;fy /flvg]5 . ;xof]usf] nflu wGojfb .

B. JolQmut hfgfsf/L

pQ/bfttsf] gfdM ब्यब्सायको नामM

lnË M k'?if dlxnf t];|f] lnlË

pQ/bftfsf] k]zf M

7]ufgf M ufpkflnsf gu/kflnsf वार्ड न 6]lnkmf]g÷df]jfOn M

c. ;fgf, demf}nf tyf n3' pBdLsf] ca:yf dfkg

1 tkfO{n] cfˆgf] Joj;fo btf{ u/fpg' ePsf] 5 < 1=5

2=5}g

2 olb 5 eg] s] df btf{ u/fpg' ePsf] 5 < 1=d"No clej[l4 s/ -Eof6_

2= Kofg

3= gu/kflnsf÷ufpFkflnsf

4= 3/]n' tyf ;fgf pBf]u

5= cGo -v'nfpg'xf];_

3 tkfO{n] jflif{s ;/b/ slt /sdsf] sf/f]jf/ ug'{x'G5 < jflif{s ;/b/ -?_

4 tkfO{n] clxn] ;Dd cfˆgf] Joj;fodf s] slt k"Flh

nufgL ug'{ ePsf] 5 <

5 tkfO{sf] o; Joj;fodf nufgL ePsf] k"lhsf >f]tx?

s] s] x'g <

1= Joj;fosf] cfo

2= k"/fgf] jrt

3= 3/ l5d]s, ;fyLefO{ cflbjf6 C0f lnPsf]

4= a}+s, ljlQo ;+3;+:yf, ;xsf/Ljf6 C0f lnPsf]

5 = ;Dklt ljlqmjf6 cfPsf] /sd

6 = cGo -v'nfpg'xf];_

6 tkfO{n] olb C0f lng' ePsf] 5 eg] To;;+u

;DalGwt s] s:tf ;d:ofx? 5g <

47

D. ;fgf, demf}nf tyf n3' pBdLnfO{ ljlQo cfjZostf / To;sf] Joj:yfkg

1 tkfO{ cfˆgf] Joj;fo a9fpg O{R5's

x'g'x'G5 <

1= 5'

2=5}g -olb 5}g eg] ;]S;g E df hfg]_

2 olb tkfO{ Joj;fo j[l4 ug{ O{R5's x'g'x'G5

eg] slt yk k"lh cfjZos k5{ <

1= ! nfv ;Dd

2= ! nfv b]lv @ nfv ;Dd

3 = @ nfv b]lv $ nfv ;Dd

4= $ nfv b]lv ^ nfv ;Dd

5 = ^ nfv b]lv * nfv ;Dd

6= * nfv b]lv !) nfv ;Dd

7= !) nfv b]lv dfly

3 olb tkfO{nfO{ yk k"Flh cfjZos k5{ eg]

s] sfdsf] nflu cfjZos k5{ <

4 tkfO{sf] Joj;fo j[l4 ug{sf] nflu tkfO{;+u

cfˆg} k"lh 5 ls 5}g <

1=5

2=5}g

5 tkfO{nfO{ Joj;fo j[l4 ug{sf] nflu cfˆg}

k"lh k|of{Kt 5}g eg]] slt C0f lng' k5{ <

6 tkfO{n] cfˆgf] Joj;fo j[l4sf] nflu yk

cfjZos k"lhnfO{ s'g >f]tjf6 h'6fpg'

'x'G5 <

1= 3/ l5d]s, ;fyLefO{ cflbjf6 C0f lng]

2= a}+s, ljlQo ;+3;+:yf, ;xsf/Ljf6 cflbjf6 C0f

3 = k"/fgf] cfˆg} jrt


7 tkfO{n] cj lng] C0f;+u ;DalGwt

;d:ofx? s] s] xf]nfg <

1= C0f k|fKt ug]{ e/kbf]{ >f]t 5}g

2= Jofh ltg{ ufx|f] 5

3 = ls:tf ltg{ ufx|f] 5

4 = C0f lng w]/} vr{ nfU5

4= Jofhb/ w]/} 5


E. ;fgf, demf}nf tyf n3' pBdLsf ljsf;df /x]sf afwfx?

1 tkfO{sf] cfˆgf] Joj;fodf yk c? ;d:ofx? klg

5g <

48

Annex VII: KIIs for Financial Intermediaries

a}+s, ljlQo ;+3 ;+:yf / ;xsf/Lx?;+u ul/g]] k|Zgkq

!=;+:yfsf] C0f nufgLsf k|fyldstfx? s'g s'g If]qdf 5g <

@= n3' ;fgf tyf demf}nf pBdLnfO{ nlIft u/]/ k|bfg ug]{ C0f ;DalGw ljz]if sfo{qmd 5g ls 5}gg<

#= olb 5 eg], k|lt Joj;foL C0f nufgLsf cf}ift cfsf/ slt hlt 5 <

$= n3', ;fgf tyf demf}nf pBdLdf ljt/0f ePsf] dWo] slt k|ltzt lgdf{0f If]q;+u cfa4 C0f 5 <

%= n3', ;fgf tyf demf}nf pBdLnfO{ C0f lbOPsf] 5}g eg] lsg / s] sf/0fn] lbOPsf] 5}g <

^= n3', ;fgf tyf demf}nf pBdLnfO{ C0f k|bfg ul/G5 eg] cem j[l4 u/fpgs] s:tf ;d:of 5g <

49

Annex VIII: KIIs Questionnaires for Municipality

प्रतितनधध ब्यािसायीर न.पा./गा.पा. प्रतितनधधसग गररने] k|Zgkq

pQ/bftf;+usf] cg'dltkq

lk|opQ/bftf,

g]kfndfe"sDk kl5sf] k'g{nfesfnflucGt/fl{ \i6«o ljsf; ljefuo"s]sf] cfly{s ;xof]udf ;+rflnt kl/of]hgfsf] nflulgdf{0f If]qsf]

af/]dfykhfgfsf/L lngsfnflutkfO{+nfO{ g]kfn ljsf; cg';Gwfg k|lti7fg of] cWoogdf ;xeflu u/fpg rfxG5f}+ . lgdf{0f jhf/

k|0ffnLnfO{ Joal:ytug{ s;/L ;lsG5 eGg] s'/f yfxfkfpg of] cWoog dxTjk"0f{ 5 . o; cWoogdf ;xeflutfsfnflunueu !)—

!%ldg]6 hlt ;do nfUg]5 . ;e]{stf{n] tkfO{+n] lbPsfk|To]s k|Zgsf] pQ/x?sf] /]s8{ klgug{ ;Sg]5g eGg] s'/fsf] oxfFnfO{ hfgfsf/L

u/fpb} tkfO{+n] lbg'ePsfpQ/x?sf] /]s8{ uf]Kotfsf ;fy /flvg]5 . ;xof]usf] nflu wGojfb .

JolQmut hfgfsf/L

pQ/bfttsf] gfdM ब्यब्सायको नामM

lnËM k'?if dlxnf t];|f] lnlË

pQ/bftfsf] k]zf M

xfn /x]sf] 7]ufgf M ufpkflnsf gu/kflnsf वार्ड न 6]lnkmf]g÷df]jfOn M

tkfO{sf] gu/kflnsf÷ufpkflnsfdf s] slt k|s[ltlsf lgdf{0f If]qsf Joj;foL 5g <

s|+=

;+=

Joj;foLsf] gfd

btf{ ePsf btf{ gePsf

n3'

pBd

;fgf

pBd

demf}nf

pBd

n3'

pBd

;fgf

pBd

demf}nf

pBd

1 हार्डवेयर ब्यािसायी

2 क्रसरब्यािसायी

3 इटाब्यािसायी

4 हालो कंक्रक्रट ब्लोक र सी एस इ बि

उत्पादक

5 ढंुगा काट्ने मेससनकाब्यािसायी

6 िालुवा तनकाल्ने ब्यािसयी

7 काठको काम गने ब्याब्सायी

8 यािायाि ब्यािसायी

9 सुक्ष्म िथा साना ठेकेदार

10 अन्य (खुलाउनहुोस)

tkfO{sf] gu/kflnsfdf n3' pBd tyf k"jf{wf/ ljsf; ;DalGw s] s:tf of]hgfx? 5g <

olb s'g} of]hgf 5g eg] jtfO{ lbg' x'G5 ls<

50

Annex IX: Observation Notes on Market Prospects

cjnf]sgstf{sf] cjnf]sg नोट

s_ jhf/sf] cj:yf

!= jhf/ ;+/rgfdf dfu / k"lt{sf] cj:yf

@= jhf/df k|ltikwf{sf] ca:yf

v_ Joj;foLsf] jhf/ lx:;f

!= clxn]sf] Joj;flosf] cj:yf

@= Joj;flos /0flgtLx?sf] k|of]usf] cj:yf

u_ jhf/df :yflgo>d / k"Flhsf] kl/rfng

!= >d / k"lhsf] dfusf] ca:yf

@= >d / k"lhsf] cfk"lt{sf] cj:yf

#= ;+u7g / e"ld ljsf;sf] cj:yf

3_ Joj;flos jftfj/0f

!= cj;/

@= r'gf}tLx?

ª_ Joj;flos ;x'lnot÷;'ljwf / bLuf]kgf

!= ;/sf/L s/, ;'/Iff, :yflgo lgsfosf] ;xof]u, jf6f]3f6f]sf] ljsf; / jhf/ lj:tf/

@= Joj;fo lj:tf/df cGo cfjZos ;xof]u

r_ cGo M

!= hg;+Vofsf] cj:yf, a;fO {;/fO{, jhf/ Ifdtf

@= k"jf{wf/ ljsf;sf ;+efjgf / r'gf}tLx?

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