It is clear that the majority of Nepalese citizens / society of Nepal has not had the privilege of banking services.  This segment covers over 80% of Nepal and is those that live in both urban/rural areas of Nepal.  These segments have traditionally been considered “not bankable” and or having very high costs and high risks.  However, the financial institutions should not consider the segment in this way.  As per the main objective of the financial institutions of the country they should have vision and mission of becoming a strategic player as an economic engine for the national – all segments of society have to be serviced. This task can be achieved with tools such as: promotion of microfinance, micro enterprise development and small & medium enterprises. However sincere political will, private sector involvement and participatory community are the success ingredients.
With regards to rural/urban small and medium enterprises and micro financing, it is known that the problems for commercial banks has never been the “money / capital” but the “access” to it. The ratio between the deposit, loans & advances and investments is as follows 23: 14: 5 (2004,Nrb). It should not be ignored that this segment of the Nepalese population can be a potential credit-deposit business opportunity. The annual reports of most of the institutions catering this segment show that the repayment ratio is higher than 95%. However it should be noted that according to the United Nations Capital Development Fund, just 1% of MFIs around the world are financially stable, and Nepal is no different.
Most importantly over the last few years, the margins have shrunk primarily due to overcrowding of the lenders in few market segments weakening the demand for finance in business sectors. This also makes MF and SME an alternative lucrative business opportunity. However the commercial banks lack the experience and expertise as required. Hence, it would be prudent to invest in pilot actions for some time with the help of external advisers and third party’s that have local and regional knowledge and acceptance. It is necessary to invest money in action research, trainings to better the human resources and also to change the conventional banker’s perception that,” the poor are not bankable.”
This vision is a necessary to be cultivated in most of the senior management of such institutions. SMEs and Micro finance is where the immense opportunity lies to distinctively create a competitive advantage over the big foreign financial institutions that can enter the Nepalese markets in 2010. In addition to immense business opportunity in the untapped market. This portfolio would further add to banks books which can differentiate the bank from others for a merger /acquisition which is inevitable in 2007. The global competitions will strategically force many financial institutions   for mergers/acquisitions.
According to the Trade Insight,” Over 95 percent of the industrial establishment in Nepal fall in the SME category, generating over 80 percent industrial employment.” However this strata has also been deprived from the banking services. In most cases no loan below 2500 K is provided by a commercial bank. Where such loan facility exists, a conventional means of collateral is demanded. It is high time the financial institutes adopt an innovative means of collateral. Joint effort would be made with various interest groups: NGOs, INGOs, international agencies, private & public entity and Government to develop modality to facilitate loans and other banking services in SMEs and micro financing. However it is necessary for the partners to restrict themselves to their field of expertise in an integrated framework approach to create a win-win situation.
In the past the multi/bilateral Aid agencies have distorted the market. They have seriously failed to draw a line between the credit Vs non-credit capital. This has led to a perception that all loans are aid or soft loan. The banking industry has to work with various tools of awareness programs, orientation and by offering products and services targeted to this sector bring a shift in such perceptions. It should be clearly understood that this is a business-to-business proposition and is thus a profit motive exercise. However, due to this being a new area for the banks, flexibility in how to approach this sector will be of primary importance and the banks willingness to do that in order to develop products / services to this segment. It is highly recommended to include services like insurance and since poor households generally are more vulnerable to risk.
The remittances to developing countries have over USD 126 billion in 2004,up by nearly 50 percent received in 2001 (NRB). Approximately 12 % of Nepalese GDP is contributed by remittance. But the fact remains that 60 % of the remitted money enter through informal channels. By 2001/02 Nepalese migrants in Middle East and Malaysia were 242,004.  This number increased more than 2.5 times to 608,525 by 2004/2005. Most of the migrant workers fall in target customer of the business sector being discussed. Packaging remittance to the products/services will definitely increase the outreach of the banks through ties with rural based MFIs.
The study of behavioral and ethical fibers of the customers is the key determinant to the banks success. I would also like to mention commercials banks in other countries with success offer such loans-deposits. ICICI-India is the 2^nd largest bank in India having catered products and services to these strata of population.
It should be a prime goal of the Nepal Rastra Bank (NRB) to facilitate and encourage the commercial banks to down scale a unit within the bank to offer products and services to these strata of the society. This sector can be regulated through better and more specific priority sector-lending directive. However the priority sector lending will be scraped from 2007. To mention few other incentives to encourage the commercial banks could be tax rebates, refinancing of the loan, organizing trainings and exchange programs with other foreign banks in such businesses. In additions to these the private-public partnerships should be encouraged to create a synergy in business modality.
However it is also need of the time to create a Credit Rating Bureau in this sector of business. A database of the customer’s history should be maintained to avoid the loan duplication. This will decrease the operational costs of the commercial bank. This will also save a lot of time that had to be spent on such analytical study.
Various modalities have worked in different countries blending into its geographical, political and socio –economic context. In the harsh situation facing Nepal partnership with Community Based Organization (CBOs) and Cooperatives would be a pragmatic strategy for both increasing the outreach and to get the feel of doing business in this strata of population. I would also advise the banking industry to create platforms where knowledge and experience can be shared and exchanged. This will act as a catalyst in the evolution of this sector. 
Last but not the least I recommend all the commercial banks to think out of the box and get involved in extending their products and services to new segments of the society. They should not forget their obligation to bring financial inclusion in the society. Furthermore this should not be ignored when the returns in this segment is higher than the other segments. Moreover the pie of this segment is so big that the competitions can be ignored. However special care should be given to develop mechanism to facilitate such markets. This strategy would help injecting money into the economy bringing about change in various spheres of the country.
(The author is currently working at Bank of Kathmandu Ltd as Head-Micro Finance)

It was South Asia that had the first woman Prime Minister (PM) in the world. Sirimavo Bandaranaike of Sri Lanka in 1960 became the first PM, followed by Indira Gandhi in India in 1966. From 1980 onwards, South Asian politics began to be frequented by women.
But the irony is there is a huge dichotomy between women in top political leadership and women in politics in general. As in other South Asian countries, women legislators in Nepal constitute less than a half of the number that is prescribed by the United Nations, which is 33 per cent.
Though the visibility of women gives a high profile to the women's rights in general, it seems Nepali male political leaders do not want that to happen. They feel proud to say that they are happy with only about nine per cent women participation in the central level of the political parties. And it seems including women at decision making level threatens them. There was no woman representation except a single member once in either side of the talks that took place between the state and the
Maoists in the past. The reason for it is obviously the lack of women at decision making level.
Expecting the male leaders to be liberal is out of question. When they come across capable women candidates, they don't give them a chance, and when women get frustrated and recede, they say there are no eligible candidates. Though our leaders have promised to make democracy inclusive, already there are signs that they are not going to stick to their promise. It seems they are not going to take the trouble of making democracy inclusive, though they have vowed to do so. Even if women are at
all given a little space in this cabinet when it is expanded, they are definitely not going to get the proportionate representation they deserve (women comprise more than 50 per cent of the country's total population).
There is not even a single woman minister in the cabinet formed after the restoration of the Parliament. Despite having all the required qualifications, it seems Chitra Lekha Yadav won't get the opportunity to become the Speaker of the House, which is currently vacant, only because she is a woman. They do not want to support Yadav, the incumbent Deputy Speaker of the House of Representatives, as a candidate for the post of the Speaker.
Yadav is one of the few clean and capable leaders we have today. During the royal regime, when the then Speaker Tara Nath Ranabhat was all but groveling before the king, and enjoying the facilities his post provided him, it was she who dared to conduct the session on the road. When the popular movement restored the house, the manner in which she conducted the first session was a sight to see!
Nobody else could have done better than her. I had an opportunity to spend some time with her a few months back. She had stressed for the need to transform Nepali politics by making it clean. And she had repeatedly said that it was necessary to
eradicate money, mafia and muscles (three Ms) in order to do so. She had explained that she was in politics not only to lead but also to transform politics by exterminating three Ms. In order to make the government inclusive, it is crucial for the parties not only to elect Yadav for the post of the Speaker but also to include women in the cabinet when it is expanded. Few
parliamentarians have recommended her, which was positive. Though women's representation at policy level does not always ensure justice to women's issues, it is essential to prove that women are no less capable than men.
Chitra Lekha Yadav deserves to be the Speaker. If our leaders are really serious about making the state inclusive, and letting women, among others, have their say, this is the one of the best ways.

Child labor is so commonplace in Nepal that to most Nepalese, it is unremarkable and therefore invisible. But even more appalling is the situation of child domestic labor, one of the worst forms of human labor made more shameful because of the fact that it goes on unabated and unchecked under the same middle class roof whose occupants profess to be upright citizens of the country who take social issues seriously.
Children have always had to help their families in Nepal, but in the recent years the rising tide of violence and poverty in rural Nepal are fuelling urban migration at unprecedented rate. This trend has led to the establishment of an informal labor industry, which supplies cheap labor to urban businesses. All too often, the workers are children, sold into bondage by brokers in the urban industries to pay off interests on loans which desperate parents have taken. A recent study indicated that there are 2.6 million working children (5-18 yrs) in Nepal which accounts for 14.7 percentage of the total population of children aged 5 to 18 years. Of these, 55,000 children were involved in domestic work in urban households according to the ILO. Similarly, a report presented by Children-Women in Social Service and Human Rights (CWISH) has revealed that children below the age of 14 years form 80 percent of the domestic workforce, contradicting the law which prohibits employing children below 14.
City life undoubtedly has tremendous attraction for people from poor rural areas. And domestic service is seen as a secure position that guarantees food, shelter clothing and sometimes even education and poor parents regard this life as much better than the one they could provide their children at home. Poor rural families with connections in town try to place their children as domestic servants to wealthier families a practice which is a direct extension of the one that prevailed in the villages of Nepal centuries ago. And today, almost every middle class house holds in Katmandu and other big cities “owns” a child domestic worker. Employers particularly prefer hiring 11-18 year olds simply because they are children who are more docile and less likely to make demands for outings or raise, and are also less likely to get married or runaway, anytime soon. And for obvious reasons like their submissiveness, silence, docility compared to boys, the “employers” prefer girls. And also girls are considered to be fit for household work.
After the children are indentured, there is almost no limit to the amount and the kind of work that they have to perform as they hover around their masters at their beck and call. They have to cook, clean, baby-sit, escort children from school, shop, tend the garden and even lend a helping hand when there is any construction work at home. In other words, under the guise of “employing” children and providing them with food cloth and shelter, they are being exploited so that their masters can be unburdened from their daily drudgeries to lead their mobile and upwardly middle class lives in ease.
At the same time, the children are unaware of their employment contracts, especially when they have been employed through brokers. Brokers often cheat both the children and parents, keeping most of the money for themselves. Few children ever get to see a class room. It has been found that children employed as domestic helpers are frequently abused, humiliated, fed poorly, treated unkindly, beaten and even sexually abused. They have to eat separately and may b locked out of the house when the family goes out. They become truly slaves in all but name as they struggle with unstipulated working hours and live under constant scrutiny and fear, subject to their master’s mood swings.
So how does all this go on unchecked and unabated? The sad thing is the people find it convenient to resort to the same old argument about Nepal’s poverty, and the children being better off seeking a better life in the city. But how can they not when even the parents of the children themselves believe in this meaningless notion to the core?
Similarly, the argument that a 12 year old servant-girl is better off contributing to her family income, getting city wages, rather than breaking her back over meager harvest with 7 children to take care of is used time and time again. Those who shamelessly endanger the future as well as the mental and physical health of these children for the sake of the charade of “class” they put up are quick to absolve themselves of their hypocritical morality.
So how do we address this problem before it becomes a socially sanctioned evil? One way of solving this problem could be by legalizing domestic labor so that domestic workers rights can be promoted as a potential employment generating sector. Similarly, awareness and sensitizing programs among employers is important for the promotion of good practices and for the promotion of a code of conduct for the employers. But as long as the people who force children to work in degrading conditions while lying to their own conscience fail to see the damage they are doing to the children, themselves and the country, child domestic labor will continue to thrive, unchecked and unabated.

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