KATHMANDU UNIVERSITY SCHOOL OF

MANAGEMENT (KUSOM)

Project Implementation

Assignment 1

Submitted to:
Mr. Krishna Ram Khadka

Submitted by:
Utshav Rayamajhi
Roll no. 19325
MBA Spring 2019

August 22, 2020

 Project Description:
The objective of Micro, Small, and Medium-Sized Enterprise Sector Development Program
(MSME SDP) was to promote private sector development in general and the MSME sector in
particular. The project will be consisting of policy reforms and extending credit to MSMEs, so to
support business development and facilitate implementation program. As for the major rationale
of the project was to support MSMEs so as to broaden the country's economic base, which was
narrowly focused on imports, trade and hydropower, and to expand employment opportunities
for a labor force that was growing rapidly through rural migration and the advent of a large youth
groups.

Micro, Small, and Medium-Sized Enterprise Sector Development Program

Outcomes/Output Indicators
Outcome  Increased number and growth of
Improved enabling environment for doing business registrations (E.g. 50 Nos. and
business and greater access to key resources growth rate of 10%)
 Reduced days and procedures in setting
up a new business
 Increased number of clients and
granting of total loan portfolio in the
MSME-oriented sector by financial
institutions

Output
1. Established a coordinated policy, strategy,  Established an MSME unit to facilitate
and institutional framework for MSME coordination between different concerned
development ministries and other relevant stakeholders,
including the private sector
 Prepared and adopted long-term policy and
strategy (i.e. White Paper) for MSME
development

 Developed RIA methodology, policy, and

2. Enhanced business laws and regulations guidelines
 Piloted RIA on two selected draft business
laws (Business Registration Act and
Industries and Investment Act)
 Reduced time involved in manufacturing
business formalization process from
6 month – 3 months (i.e. IEA & AIE is
3. Increased access to market-based finance required)

 Improved MSME lending practice at

financial institutions by increasing the no.
 of loan portfolio grant allocated in the
MSME oriented sector, and maintain its
NPL (increasing from 5% & 16% of total
4. Strengthened business support loans distributed in the trade &
infrastructure manufacturing sector with maintain its
NPL from 2.5-3 % in 2015)

 Prepared draft plan for testing,

establishment of standards and product
certification
 Draft Standard Act submitted to the
National Assembly

Data Collection Method:

For the purposed project data collection, the Primary data for above indicators will be collected
through two methods; First Focused Group Discussion (FGD) & Census. The FDG of this
project will be held with concerned ministries, mayors & ward chairperson of the municipalities
or VDC. The data sources will be taken from The National Census, annual and quarterly
progress reports by Project Management Office (PMO) and the industrial survey, Trade
Statistics, Published unpublished reports of Govt.

Activities for the output achieving:

1. Established a coordinated policy, strategy, and institutional framework for MSME
development
1.1 MTCS to establish a specialized MSME unit to facilitate coordination between different
ministries and other involved government agencies and preventatives from the private sector by
November 2020
1.2 MTCS to preparing a draft long-term policy and strategy framework and program for MSME
development (a White Paper on MSME development), with a revolving 2-year action plan, based
on competitiveness study, supply chain and value-added analyses, and consultation with the
private sector and relevant stakeholders by March 2022
1.3. Government to publicize the White Paper and on MSME development and discuss with all
stakeholders in a proper forum to be set-up for the purpose by March 2022
1.4. Government to adopt the MSME policy and strategy framework and development program
with the 3-year action plan for MSME development by March 2022
1.5. MSME unit to implement first year of the 3-year action plan for MSME development by
October 2023
1.6. MSME unit to undertake the above-mentioned actions, conducting necessary available
competitiveness studies and supply chain analyses by November 2023

2. Enhanced business laws and regulations

2.1. MTCS to establish an RIA working group under MSME unit undertake pilot implementation
of RIA by November 2020.
2.2. RIA working group to conduct pilot RIA exercises on the draft [Nepal Company Act and/or
Industries Enterprise and Investment Act] legislation by May 2022
2.3 MSME unit to submit RIA policy and MSME unit to review and revise, as needed, the draft
legislation based on RIA recommendations by May 2022.
2.4 MTSC to accept and approve RIA policy by November 2023
2.5 Government to submit the revised legislation to the National Assembly and to reducing the
overall time to involved in the business formalization from 6 months to 3-months by October
2023.
2.6 MSME unit to set up a website with complete information on the business formalization
process with detailed information about the license process and time and costs involved by
November 2023
2.7 Provide training and technical assistance to MSME unit and the RIA working group to
implement the agreed reform agenda and pilot RIA on selected business laws by November 2010

3. Increased access to market-based finance

3.1 To provide and submit 5 –year strategy and business plan which includes an appropriate
corporate governance structure, human resource strategy, and performance targets to the
National Cooperatives Bank (NCBL) of Nepal by 2020.
3.2 MSME unit to review existing credit/guarantee schemes and other incentives provided to
MSMEs with respect to effectiveness by November 2020
3.3 MSME unit to submit plan to rationalize incentives for MSMEs by May 2022

4. Strengthened business support infrastructure

4.1 Establishing a standard working group to determine quality control and product certification
standards for key industries in the MSME sector by November 2020
4.2 SQCA to submit the Standard Act to the National Assembly by March 2022
4.3 Providing institutional capacity building and technical support to MSME unit and SQCA to
undertake the committed reform actions, including establishment of product standards by
November 2023
4.4 Government to prepare plan for testing, establishment of standards, and product certification
by November 2023 based he recommendations of the standard working group.