Time, cost compliance hindering entrepreneurs investment decision

KATHMANDU, SEP 27 -

As many as 34 percent of the entrepreneurs have decided against making major investment due to problems relating to complying with the government regulations.

The majority of the entrepreneurs claimed that time and cost of compliance are too uncertain for investment planning instead of higher compliance cost and time, according to a Stakeholder Perception Survey carried out by the National Business Initiative (NBI) and South Asia Enterprise Development Facility under the International Finance Corporation (IFC).

According to the survey, 60 percent of the entrepreneurs said uncertainty over time and cost of compliance was making it difficult for them to make investment planning, while 31 percent were concerned about higher compliance cost and time.

The survey, based on perceptions of opinion makers, labour representatives and owners of private businesses, was conducted in 400 private businesses enterprises in nine sample towns: Biratnagar, Bhadrapur Kathmandu, Bharatpur, Hetauda, Pokhara, Bhairahawa, Nepalgunj and Dhangadi.

According to the NBI, the survey data were collected through face-to-face interviews. A majority of the entrepreneurs termed political instability, weak infrastructure and lack of access to credit as three major bottlenecks for their business to grow.

The study shows that 40 percent of the entrepreneurs related pointed poor information technology electricity and water supply as major hindrance, while 37 percent blamed political instability as a major stumbling block. Another 36 percent termed lack of access to credit as the key deterrent to their business growth.

Amid complaints about labour unrests by the entrepreneurs, the stakeholders termed politicisation of labour unions as one of the top five concerns. Entrepreneurs said that multiple trade unions making even higher demands to create political space for themselves are badly hindering their businesses.

At an interaction on the finding of the report, NBI Chairman Padma Jyoti also stressed the need for improving the quality of goods, transparency and accountability among the business community. He said that the private sectors could maintain their own standards to ensure quality despite poor provision of quality assurance from the public sector.

Revision of minimum wages remains the biggest concern for labourers, with security coming second on their priority list. While other stakeholders termed quality of products and services as their top priority.

There is a positive perception about private sector’s contribution to the country’s economic development, according to the survey. About 80 percent of the stakeholders were aware of the important role of private sector for the economic development of the country, it says.

Source: The Kathmandu Post