PROMOTING ENTREPRENEURSHIP THROUGH BUSINESS INCUBATION

Embracing entrepreneurship is a multidisciplinary endeavour requiring a 360-degree skill set that blends innovation, finance, technology, market prospects, leadership, branding and strategy, alongside the decision-making capacity to solve the multifaceted issues of the investment ecosystem. A few enterprises succeed and many fail. These failures carry their own stories in the lives of entrepreneurs. 

In the entrepreneurial world, starting a business is easy, but sustaining it is a significant challenge. In this spectrum, many incubators and accelerators have evolved globally to support businesses in their growth and sustainability.

Entrepreneurs opine that these incubators and accelerators are effective in helping them make right decisions, develop pro and counter cyclical strategies, access finances, utilise technology and abide by regulatory provisions. Mostly, startups have been served by these accelerators and incubators. The strengths of startups are that they utilise technology and are formed on the grounds of innovation and a wider understanding of customer choices.

Evolution and impact of business incubation and mentoring

Initially, banks were considered the primary growth partners of enterprises. Discussions regarding business plans, monitoring and the supervision of borrowers were integral to the advice and mentoring provided by these institutions. “It was primarily the duty of banks to look after the sustainability of borrowers. Banks nurtured many businesses through their mentoring and advice,” says Barsha Shrestha, former banker and current Business Head of ICRA Nepal. “I personally feel proud sanctioning the loan to Shivam Cement when I was serving at Nabil Bank. Over time, they have grown and contributed significantly to production and jobs, while also attracting large-scale FDI to the cement industry.”

Subsequently, mentoring and incubation became widely practiced in the country as a large number of returnee migrants, the government’s entrepreneurship development policy, and priority sector lending provisions for banks provided fertile ground for embracing entrepreneurship. Many corporates have also supported startups to foster innovation. 

The concept of business incubation in Nepal stems from development partner-led entrepreneurship programmes such as Helvetas Nepal, UNDP-supported Micro Enterprise Development Programme (MEDEP), and various micro-credit initiatives. Kathmandu University and Tribhuvan University have also established their own business incubation centres (BICs). Private sector umbrella bodies have set up similar cells, recognising the importance of mentoring and incubation for new enterprises.

In the meantime, a trend emerged of corporates supporting social enterprises dedicated to larger social causes and non-profit goals. These corporates appointed incubators to provide the necessary mentoring and incubation services. The philosophy behind incubation is that newly established enterprises are similar to newborn babies, requiring special care to adjust to external scenarios and needing to be incubated until they build the strength to survive in the external environment.

Strengthening the startup ecosystem through strategic investment and incubation 

Private equity and venture capital firms have been providing business acceleration services that largely help businesses to upscale. There are over a dozen active PE/VCs licensed by the Securities Board of Nepal (SEBON). Some of them are backed by Development Finance Institutions, including Dolma Impact Fund and Business Oxygen (BO2), alongside local players like Kriti Ventures, Team Ventures, True North Associates, Aadhyanta Fund Management and NIBL Equity Partners, among others. “We have been supporting businesses in upscaling opportunities by analysing their growth potential and providing the required handholding to them,” shares Nischal Singh Bhandari, Partnerships and Communication Manager at Aadhyanta Fund Management.

The Industrial Enterprise Development Institute (IEDI) under the Ministry of Industry, Commerce and Supplies (MoICS) has been promisingly supporting enterprises through its Business Development Service (BDS). 

Most importantly, Sushma Sharma, Chief Executive Director of Phool Prasad, applauded IEDI’s startup credit and business development services. She is one who obtained IEDI’s startup credit for her newly established venture. 

Startup lending ranging from Rs 500,000 up to Rs 2 million at a 3% interest rate for a five-year period without collateral has helped in embracing enterprises and the recovery rate is almost one hundred percent even before the maturity period, according to Umesh Kumar Gupta, Executive Director of IEDI, who noted, “For this year, more than 10,000 applications have been lodged by aspirant entrepreneurs seeking startup credit.”

There are hundreds of incubators and accelerators in the country creating a convenient environment for startups and businesses with upscaling opportunities, offering a wide range of services from training to advisory support in various areas.

Some other accelerators and incubators include FasterCapital, Skill Up Nepal, Idea Studio, Seed Investments, I-Cube (Innovate, Iterate and Incubate), Alpha Plus, Avasar Equity, CWEDA Equity, MOGHA InfraBlocks, Global Equity Funds, National Funds, Nepalese Young Entrepreneurs’ Forum (NYEF), GeoKrishi, Everest School of Startups, and Nepal Agribusiness Innovation Centre (NABIC), among others. 

For example, GeoKrishi operates an Incubation Centre as part of its mission to digitalise agriculture in Nepal, offering a three-month programme for agricultural students and aspirants to develop agri-entrepreneurship, provide practical knowledge and mentorship, and empower farmers with new technology, essentially acting as a hub for agri-tech innovation and farmer empowerment.

I-Cube is a UK-funded incubator programme. The six-month programme provides a collaborative environment aimed at enabling entrepreneurs to develop innovative solutions, refine business concepts and build sustainable enterprises. The programme typically incubates up to 10 high-potential startups per cohort and has been supporting early-stage ventures for the past three years through structured mentorship and capacity-building initiatives. 

Similarly, FasterCapital is a work-for-equity-based online incubator and accelerator that primarily supports technology-driven startups. The platform assists founders in developing pitch decks, preparing business plans and accessing an international network of investors, mentors and strategic partners. Its focus areas include FinTech, EduTech and other technology sectors, with services extending to capital raising, talent acquisition and expert advisory support.

Tshering Lama, Executive Chairperson and Co-founder of Idea Studio Nepal (ISN), shared that the organisation has incubated more than 180 ideas and supported 68 operational startups. The organisation runs separate incubation and acceleration programmes. “Each cycle selects approximately 35 high-potential ideas for an intensive two-month incubation process focused on leadership development, entrepreneurial skills and strategic business planning,” according to Lama.

Likewise, Skill Up Nepal is a German-funded initiative aimed at addressing the gap in sustainable development knowledge and green skills among Nepali entrepreneurs. The programme focuses on promoting environmentally sustainable businesses by establishing green incubation centres, delivering targeted training and facilitating market access. Currently operational in Surkhet, Salyan and Kanchanpur, the programme follows a cost-sharing model, with participant contributions generally ranging from 5% to 20% depending on socio-economic conditions, according to Skill Up Nepal.

Nepalese Young Entrepreneurs’ Forum (NYEF), the youth entrepreneurs’ arm of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), has been playing a significant role in fostering a business-friendly environment for young entrepreneurs by facilitating idea exchange, mentorship and professional training. NYEF offers a two-week pre-incubation programme for individuals with early-stage startup ideas. The programme equips participants with the fundamental business knowledge and practical tools required to launch and scale ventures.

Enterprise and business incubation and accelerators, aimed at nurturing enterprises to survive and sustain while navigating multifaceted challenges and developing resilience, as well as accelerators that support maximising growth opportunities to upscale existing enterprises, are instrumental in developing the country’s investment environment, according to Rajan Bajracharya, Founder of GeoKrishi.Startup incubators and accelerators are structured, collaborative programmes designed to support early-stage enterprises through mentorship, capacity-building and access to professional workspaces. These platforms play a critical role in nurturing startups from conception to market readiness. With the rapid growth of entrepreneurship in Nepal, a wide range of incubators and accelerators has emerged across the country. Increasingly, Nepali startups no longer need to relocate abroad in search of conducive ecosystems, mentorship or institutional support. Domestic programmes now offer comparable resources to help entrepreneurs refine ideas, scale operations and attract investment.