Impact of Small and Medium Scale Enterprises in the Generation of Employment in Nepal

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DOI: 10.21522/TIJMG.2015.SE.19.02.Art025

Authors : Dipti sharma


For an underdeveloped nation uplifting economy is a challenge. Raising economy in such context must have accelerated growth and development that improves quality of life. Small and medium scale enterprises are provisions for fast growth and fulfillment of economic prosperity by any nation. The economic reform in the early 1990s in Nepal pulled the attention of the private and joint investment to seek the financial sector. National development strategies, the strategies towards poverty reduction of individual member countries should underline the importance of commercial sector promotion. In this research the total of 200 copies of the questionnaires to be administered. The instruments to be used are gathering information for this study includes questionnaires and interview. Two different statistical methods are to be employed to analyze data for the study. The tools are simple percentage and chi square test. The results of the study reveal that the most common constraints hindering small and medium scale business growth in Nepal are lack of financial support, poor management, corruption, lack of training and experience, poor infrastructure, insufficient profits, and low demand for product and services. SMEs expansion boosts employment more than large firm growth because SMEs are more labour intensive thereby subsidizing SMEs may represent a poverty alleviation tool, by promoting SMEs and individual countries and the international community at large can make progress towards the main goal of halving poverty. Entrepreneurial development is therefore important in the Nepalese economy which is characterised by the following heavy dependence on agricultural production, high unemployment, low utilization of industrial capacity, high inflation rate, and lack of industrial infrastructural base.

Key words: Youth, Employment, Economic growth, Small and medium enterprises


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