Institutional Support to Entrepreneurship Development | 203

Prakash shrestha
Kathmandu Nepal
1.1 Areas for Institutional Support to Entrepreneurs
The institutional support to entrepreneurs is needed in
different areas. The major areas are as follows:
1. Capital Resources
Adequate capital resources are needed to finance new
ventures. They are too essential in order to start, establish,
modernize and expand the business. But many entrepreneurs lack
adequate capital resources in developing countries like Nepal. In this
situation they need the institutional support of financial institutions
such as commercial banks, finance companies, cooperatives and
other financial institutions. These financial institutions provide loans
to entrepreneurs at reasonable costs. Similarly, in some cases, many
international non-government organizations (INGOs) may also
provide concessionary loans to target entrepreneurs.
2. Raw Material Supply
Easy and regularity of raw materials are very important for
entrepreneurship growth. The scarcity of raw materials hampers
business activities. New ventures, mainly those based on new
technology, require raw materials from global sources. Many
Nepalese industries such as woolen carpet, ready-made garments
and handicrafts are dependent on imported raw materials and
intermediated products. The problem of raw materials is one of the
main reasons for low capacity utilization. In such reality, institutions
are needed to take care of raw material supply to meet the need of
a variety of entrepreneurs.
3. Marketing
Marketing strategies, skills, experience, information and
resources are essential for success of any business venture. Many
new ventures fail because they lack marketing techniques. They
may not be able to search and expand the market. In such cases,
institutional support is required to entrepreneurs to support them at
the marketing front. The institutions are needed to help in marketing
of the products produced. They are also needed to establish
emporiums, organize trade fairs and exhibitions to market the
products of entrepreneurs. Local NGOs, private institutions and
many government agencies are important to fulfill such needs.
4. Competency Development
Entrepreneurs need to develop their competencies as well as
skills of their employees. For this purpose, they need to run various

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education and training programmes. But they may not be able to

run such programmes because the programmes are expensive to
them. In such case, institutional support is needed to run and
organize those kinds of education and training programmes at no
cost or highly subsidized costs.
5. Access to Infrastructure
In order to start any business venture, a minimum level of
prior built-up infrastructural facilities is needed. The infrastructural
facilities can be industrial estates, transport, power and energy,
communication, water, waste disposal, etc. Creation of such
infrastructural facilities involves huge funds which the small
entrepreneurs do lack. Institutions are needed to build such
infrastructure. Generally, government institutions, supported by
foreign aid, undertake the task of infrastructure development.