Our impact, Their voices

Decent work along the supply chains: Nurturing women’s entrepreneurship in Nepal

A step towards formalization of women-led, small and micro home-based enterprises in Nepal’s supply chains helps business and workers alike.

Feature | Nepal | 03 August 2021
Kalpana Shreshtha, owner of Lajga Handicraft, a home based business in Nepal
Nepal (ILO news) - Skilled in knitting and weaving clothes and other handmade items, Kalpana Shrestha from Kathmandu, often helped her friends to make woollen clothes.

Word about the quality of her well-knitted garments soon spread, bringing her more requests, and from this casual work 42-year-old Ms Shrestha’s ‘formal’ business began.

“Even though the income was small, I felt empowered. I received appreciation for my work,” Ms Shrestha said about the start of her embryonic business, Lajga Handicraft, 16 years ago.

Lajga Handicraft grew from a home-based operation with just four women workers to a size where she wanted to register her business formally.

“I knew little about the government process for registration, and tax requirements. I found them complex, and the experiences shared by other business people scared me. On the one hand I wanted my business to grow, but on the other hand the processes felt like an obstacle,” she added.

After speaking with a friend, Ms Shrestha enrolled for training organized by the Federation of Woman Entrepreneurs’ Associations of Nepal (FWEAN). In partnership with ILO’s Sustainable Global Supply Chains (SGSCs) Project, FWEAN supports women-led micro and small informal enterprises to formalize their businesses and access related services.

A FWEAN team accompanied her to local government offices to register her business. They visited the Inland Revenue Department (IRD), local Ward Office and the Department of Cottage and Small Industries (DCSI). The process took almost five days and cost NPR 5,000 (approximately USD50).

“I found registration at multiple levels of government offices complex and expensive. In a way it does make new entrepreneurs like me avoid them. As we are unsure about the continuity of business and profits, we wonder if all this effort will be worthwhile. Smaller businesses need a lot of handholding,” said Ms Shrestha.

Now, she has six women workers in her micro handicrafts unit. She makes crystal beads, necklaces, bracelets, earrings, and other types of jewellery.
Kalpana Shreshtha training her team about new weaving patterns

“The number of customers has increased since the registration, and sales are better. This is because people trust registered businesses more. And the one big advantage is that I can now deal directly with the wholesalers, as I have my own PAN (permanent account number, needed for income tax) and can issue PAN invoices. I no longer depend on middle men/agents to sell my products. This has saved costs, enhanced my profits, and I have a direct link with my clients. I have more orders now,” said Ms Shrestha.

Funded by the Government of Japan, one of the SGSC project’s objectives is to promote decent work for home-based workers and other informal economy workers and units engaged in global supply chains.

“Most women entrepreneurs start an informal business and then struggle to formalize it. I believe this project will be able to enhance decent work and a safe environment for home-based workers working in such small economic enterprises,” said Ms Reeta Simha, President, FWEAN.

Ms Bharti Birla, Chief Technical Advisor for the SGSCs project stressed the benefits formalization of business can bring. “Micro, small and medium enterprises (SMEs) are not only drivers of growth, but also the key providers of employment. The challenge is to ensure that this employment is decent – allows workers to get better wages, income security, better working conditions, safety and health, social protection, and a collective voice and strength,” she said.

Small and medium enterprises (SMEs) generate 80 and 90 per cent of total employment in South Asia. With the global dispersion of supply chains, work is often subcontracted out to informal enterprises and workers such as home-based and casual workers.

“On one side, there is a need to promote decent work for the informal workers, connected with SMEs, and on the other, address the considerable challenges that these SMEs face. For most SMEs, sustainability and competitiveness, accessing markets, protection against exploitation of intellectual property, as well as accessing government’s subsidized loans and resources, etc., are areas where they too need support. To make global supply chains more sustainable, we need to support the sustainability of these SMEs as well as promote decent work down the supply chain, “ said Mr Richard Howard, Director, ILO Country Office for Nepal.

For further information, please contact

Bharti Birla
Chief Technical Advisor
Sustainable Global Supply Chains in South Asia Project
Email: birla@ilo.org