WLC Ventures supports investees to grow their business through change management, knowledge building, financial transparency, networking and mentoring.
The development and success of the Small and Medium Enterprises (SME) sector has proven to be the catalyst for development in many developing nations. Although we have accepted the importance of the SME sector in Nepal, which accounts for almost 25% of the GDP, there has not been much progress in this sector as both the supply side and the demand side constraints have not been addressed.
Until now, the limited amount of credit the Nepali banking and financial (BFI) sector has been extending to this sector is fraught with difficulties. BFIs tend to be very risk averse and have been predominantly lending only to the retail and wholesale sectors of SME that are secured by collateral, mainly, land and building. With the advent of impact fund investing, equity financing will be the basis of investments.
On the other hand, Nepali SMEs are characterised by traditional management practices with a low capital base, and inefficient use of production processes and technology. Additionally, an under-developed entrepreneurial base with relatively poor knowledge and information about business opportunities and lack of access to risk-management tools have threatened the viability of this sector.
WLC Ventures, a subsidiary of WLC, manages Nepal’s first Equity Investment Fund Business Oxygen (bo2). In addition to providing financing, WLC Ventures supports investees to grow their business through change management, knowledge building, financial transparency, networking and mentoring. In Nepal, this hand holding method is an important component missing from the conventional BFI financing modality in order for private sector to flourish.