80% of Start-ups in Koshi Province Are Profitable Despite Challenges

Kathmandu, Jan 6: A recent study by Nepal Rastra Bank has revealed that 80 percent of start-up enterprises in Koshi Province are operating profitably, even while facing hurdles such as limited capital, skilled labor shortages, restricted market access, and inadequate government support.

The study, which covers 160 start-ups that applied for loans at the Industrial Enterprises Development Institute, categorizes them into five sectors: agriculture and forestry, production-based, service-oriented, tourism, and information technology. Among them, 41.3 percent are in agriculture and forestry, 18.1 percent in production, 17.5 percent in services, 13.8 percent in tourism, and 9.4 percent in IT.

Regarding commercial potential, agriculture and forest-based industries were identified as the most promising by 43.1 percent of respondents, followed by tourism (21.3%), manufacturing (13.8%), services (10%), IT (8.1%), and energy and construction (1.9% each).

The report highlights innovation as a key factor in success: 54 percent of start-ups have adopted innovative ideas in products and services, 41 percent in production processes, and 5 percent in distribution. Entrepreneurs are predominantly young, with 39.3 percent aged 21–35, 44.4 percent aged 36–50, and 16.2 percent aged 50–70. Males constitute 74.4 percent of the entrepreneurs, while females make up 25.6 percent.

Investment in these start-ups totals Rs 2.56 billion, with 38.7 percent coming from loans and 61.3 percent from entrepreneurs’ own capital. Only 40.6 percent of enterprises have accessed government grants and facilities, underscoring the challenges in support and market access. While 45 percent serve local markets, 46.9 percent operate nationally, and just 8.1 percent export internationally.

Technology adoption varies: 27.5 percent use advanced technology, 65 percent rely on general technology, and 7.5 percent do not use technology. Marketing approaches are diverse, with social networks, personal contacts, and online tools being common methods. Employment is nearly gender-balanced, with women making up 48.4 percent of workers.

The central bank has recommended measures to further boost start-ups, including seed capital mobilization, joint-venture models, venture capital expansion, tax incentives, legal flexibility, easier access to loans, and the establishment of incubation centers at all government levels. The report also emphasizes financial literacy programs and special incentive schemes to help entrepreneurs expand market opportunities.