KATHMANDU: Most startup enterprises in Koshi Province are generating profits despite facing persistent challenges such as inadequate capital, lack of skilled human resources, limited market access and insufficient government support, a new study by Nepal Rastra Bank (NRB) has found.
According to the “Special Study Report on Startup Enterprise Trends in Koshi Province 2024/25”, made public by NRB on Monday, 80 percent of startups in the province are operating at a profit.
The central bank said the study was conducted to assess the business nature and sectoral trends of startups, their access to required resources, and the problems they face, along with possible policy solutions. Data were collected from 160 startup enterprises in Koshi Province that had applied for startup loans and were shortlisted by the Industrial Enterprise Development Institute.
The surveyed startups operate across five sectors: agriculture and forest-based enterprises (41.3 percent), manufacturing (18.1 percent), services (17.5 percent), tourism (13.8 percent), and information technology (9.4 percent).
When asked about high-potential sectors in the province, 43.1 percent of respondents identified agriculture and forest-based businesses, followed by tourism (21.3 percent), manufacturing (13.8 percent), services (10 percent), information technology (8.1 percent), and energy and construction (1.9 percent each).
The report shows that innovation is being applied across business processes, with 54 percent of startups introducing innovation in goods and services, 41 percent in production processes and five percent in distribution.
In terms of demographics, startup entrepreneurs aged 36 to 50 years account for 44.4 percent, followed by those aged 21 to 35 years (39.3 percent) and 50 to 70 years (16.2 percent). Men make up 74.4 percent of entrepreneurs, while 25.6 percent are women.
The primary motivation for starting businesses was the desire for self-reliance (37.1 percent), followed by contributing to society (25.8 percent), exploring new opportunities (25.1 percent), lack of employment (7.9 percent) and other reasons (4.1 percent).
The study estimates the total investment in the 160 startups at Rs 2.56 billion, with 61.3 percent financed through equity and 38.7 percent through loans. Only 40.6 percent of enterprises reported receiving government grants or facilities, while the remaining 59.4 percent had not benefited from any state support.
Market access remains a key challenge. The report notes that 45 percent of startups rely mainly on local markets, 46.9 percent have access to national markets, and only 8.1 percent sell their products or services internationally.
Based on technology use, 27.5 percent of startups use advanced technology, 65 percent use basic technology, and 7.5 percent do not use technology at all. For marketing, the most common method is personal networks of friends and relatives (33.9 percent), followed by social media (28.3 percent), websites (8.5 percent), online advertising and fairs (7.2 percent), traditional media (6.1 percent) and door-to-door outreach (4.5 percent).
The enterprises surveyed have generated employment opportunities for both men and women, with 48.4 percent female and 51.6 percent male workers.
To further promote startups, NRB has recommended measures such as seed funding, co-investment models, venture capital, tax incentives, legal simplification and improved access to credit. The report also stresses the need for incubation centers, targeted incentive programs and financial literacy initiatives at federal, provincial and local levels to help entrepreneurs scale up investment and access markets.
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