Study conducted by NRB shows only 16% investment in SMEs comes from Banks and financial institutions; SME creating 17 lakh jobs

Nepal Rastra bank (NRB) had recently conducted a study to analyze the Mobilization of Financial Instruments in Small and Medium Enterprises (SME).

The study has show that the SMEs have contributed 22% in the Gross Domestic Product (GDP) of Nepal and has created around 17 lakh employment opportunities.

Similarly, a total of 9.23 lakh business units have been registered, out of which 2.68 lakh are SMEs.

The interesting find of the study is that, 33% of the investment they do comes from parental property, 26% from personal savings, 16% taken as loans from banks and financial institutions, 8% from informal loans, 7% from remittance and 0.5% from Venture capitals. Even from the limited loans floated, almost 66% are of short-term nature.

This has highlighted the need to mobilize financial instruments to further stimulate the SMEs to achieve higher economic growth.