The COVID-19 pandemic has had its adverse impacts on various sectors of the nation, the industries and entrepreneurship being one of the major areas among them. Normal human activities had to come under restriction for health safety reasons. Saving lives came under pressing obligation of the governments all over world including Nepal. We live in an economically inter-connected world today and a halt in normal works naturally had its devastating effect on businesses. Due to lockdowns and other forms of restrictions on human activities to curb the spread of the deadly virus, business entrepreneurs had to bear huge losses. Factories were closed, workers remained out of work, pays and benefits were curtailed, sales outlets were shuttered down and transactions came to a grinding halt. The process of production, marketing and consumption slowed down which has created a situation of recession. Business houses were compelled to underpay or lay off their employees.
At a time when migrant Nepali workers were returning home after losing their jobs abroad due to the pandemic, domestic unemployment was rising. This was a challenging situation for workers, industrialists, traders as well as entrepreneurs. The workers had lost their means of livelihood, industrialists their capacity of production and traders their prospects of profits. As months have passed without revival of brisk business, losses are mounting for entrepreneurs. In such a situation, it is naturally difficult for them to pay land housing rents, loans, interests and staff salaries. Business entrepreneurship thrives only in active market environment which is badly affected to the threat of the coronavirus.
For the entrepreneurs hard hit by the novel virus pandemic, it is crucial to manage a survival until things turn to normalcy and trade starts to pick up pace. This they cannot do without state incentives and support. They need rescue packaged in the form of interest waiver, tax concessions, stimulation loans and subsidies. This is not a time for banks and financial institutions to apply a hard approach on interest payments and loan clearance. Companies that are doing fine in their business may not have difficulty in carrying out their financial operation but those who are already in big losses need help. In this regard, Nepal Rastra Bank, the central bank of the country, has urged the banks and financial institutions not to blacklist entrepreneurs in difficult financial situation for their delays to pay back loans and interests. The BFIs are also instructed not to act harsh so as to auction their collaterals in view of the crushing impact of the pandemic on their business performance.
Nepal Rastra Bank Governor on Sunday asked the BFIs to take into account the financial status of their clients before making them to pay back interests and capitals. Now the treatment towards the client companies have to be guided by the real situation of their business returns. If a company is mired in big losses, it is not justifiable during this pandemic situation to be stringent on payments. However, the BFIs themselves involved in entrepreneurship may have difficulty to operate in absence of financial returns. In this regard, the central bank has said that it is ready to address the pandemic-induced problems faced by the BFIs too.