Practical Action Nepal formally launched the ACRE programme in an event in Kathmandu on 30 September 2016. This was the first event of its kind in Nepal, where SMEs, business associations, incubator programmes, financial institutions, multilateral agencies and INGOs came together to discuss the challenges and opportunities for impact investing programmes like ACRE in the particular context of Nepal.
The event included a lively panel discussion with representatives of the SME ecosystem in Nepal: Siddhant Pandey, CEO and Chairman of Business Oxygen, a $50m IFC facility in Nepal; Rabi Rayamajhi, Private Sector Development Advisor at DFID Nepal; Amod Rajbhandari from The Enterprise business accelerator programme; and Bishal Thapa, Managing Director of Saral Urja Pvt. Ltd, a solar enterprise supported by Practical Action in ACRE.
The panellists uniformly emphasised the vital role that SMEs play in stimulating sustainable and inclusive development in Nepal, as well as their strong contribution to GDP. Particularly in rural areas, SMEs create jobs and promote broad economic development opportunities which can help reduce emigration.
In an animated discussion on the challenges facing growing SMEs in Nepal, whilst there was a broad consensus amongst the panellists that lack of access to capital, technical assistance and business advisory services are amongst the most pressing concerns, other major obstacles include complex financial regulations and high operational costs due to underdeveloped business ecosystems.
Despite these challenges and the fact that impact investment is very new to Nepal, the panellists congratulated Practical Action for launching ACRE in Nepal, which they saw as a much-needed, innovative programme. Despite the apparent lack of entrepreneurial vision at different levels of the ecosystem, the panellists agreed that across the country there are entrepreneurs who have the right vision and are already creating opportunities that benefit local communities. Programmes like ACRE can contribute to creating a stronger ecosystem and provide access to services that enable these entrepreneurs to grow faster and generate more impact.
Following the panel discussion, there were energetic plenary discussions, as many of the participating entrepreneurs wanted to know more about how programmes like ACRE could support them in the context of stringent financial regulations and other challenges, such as managing forex risk and the high standards of international investors. Siddhant Pandey from Business Oxygen/IFC made a poignant point by affirming that currently in Nepal, whilst there are many investment-worthy enterprises, Nepalese entrepreneurs need to be patient and work hard to make the most of the technical assistance which programmes such as ACRE can provide so that they can move from investment-worthiness to investment-readiness.
The formal event ended with final words from Achyut Luitel, Practical Action Nepal’s Country Director, and an agreement that the main players would meet regularly in the future to work together to overcome some of the current challenges in the SME ecosystem and taking advantage of the growing number of opportunities present in Nepal.
In the three months following the launch, ten enterprises made a pitch to the Practical Action ACRE team in Nepal. Of these, Practical Action is already supporting one to develop a robust business plan to present to potential ACRE investors and is currently carrying out full assessments of three more. This makes a strong case for publicising more widely our ACRE programme, especially as we are set to scale up in 2017/18. The prospects for ACRE in countries like Nepal are very exciting.