Extreme downturn in market, one-third shutters in urban areas look empty

Kathmandu: Shutters and warehouses used for trading purposes in urban areas have lately looked empty due to commercial recession.

As the people have started to abandon the valley amid the lack of trading activities, the shutters and warehouses have looked empty and locked. Shutters and shops operating in the streets as well as in the main urban centers have been closed. The shops have seen the closure as the business has stopped operating due to lack of economic activities.

According to the Federation of National Entrepreneurs, 30 to 35 percent of the shutters across the country have been closed. In recent times, the number of people abandoning business has been increasing due to the slow pace of economic activity.

People from all 77 districts come to Kathmandu Valley for study, business and jobs. The Russian-Ukrainian war, which broke out last year, and the impact of Covid-19 have had a direct impact on the country’s economic activities. The trend of giving up business is increasing day by day due to lack of operation of business.

There are 25,000 to 30,000 entrepreneurs associated with the Federation in the Valley alone. Their businesses have not been fully operational. According to the entrepreneurs, some have left business, and some are in a situation of ‘wait and see’.

High interest rate of the banks and inability to pay loan installments have caused the closure of many businesses. Th entrepreneurs say that it has become difficult to run their businesses as usual because taking loans from cooperatives is almost impossible.

Naresh Katuwal, former president of the Federation of National Entrepreneurs, said that 30 to 35 percent shutters across the country are empty due to the lack of business. According to him, the shutters have started to close down as a result of increase in rent of the house, high interest rates of the bank and the inability to pay the installments in the absence of business activities.

According to Katuwal, many people have left business activities and gone for foreign employment as they are unable to educate their children due to low business activities. He said that, although essential businesses like groceries are running, the turnover in other businesses is low.

The businessperson with four shutters have reduced their business to two shutters, Katuwal said. According to the traders, the turnover in gold, clothes, vehicles, footwear, construction materials and hardware goods is less than 50 percent. Dinesh Gupta, a businessman from New Road, said that low purchasing power of consumers have forced them to reduce the expenditure on luxury items other than essential items.

President of The Federation of Nepal Gold and Silver Dealers’ Association Manik Ratna Shakya said that the economic crisis in the country has compelled small gold traders to start doing other businesses. According to him, the transaction of gold has decreased by 50 percent due to the rise in gold price and the low purchasing power of the consumers.

According to him, only 10 kg of gold is being sold daily at present, but he is hopeful that the business will gradually increase as the month of Baisakh (April-May) is the month of marriage. He said that some businesspersons have started shifting to other alternative businesses as well as opening grocery shops by closing jewelry shops.

Posters and hoarding boards with ‘To let’ are seen everywhere in different parts of the Kathmandu Valley. Posters of ‘To let’ for housing and commercial purposes have started appearing in different places of Kathmandu, Lalitpur and Bhaktapur.

At present, posters with ‘to let’, ‘shutter on rent’, ‘room on rent’ are found in the houses and shutters of every street and place. In some cases, the rent amount is also disclosed. Dinesh Adhikari, a trader from Shankhmul, said that he has been doing the business of footwears to manage the household expenses and educate his children. According to him, even those who do small business for a living have to close the shops as they could not pay the rent.

Sharda Shrestha, who runs a grocery store in Buddhanagar, says that the rent fare is increasing day by day. She has been running a grocery store for the last 10 years and started it with Rs 5,000 rent per month and now the shutter fare has increased to Rs 25,000. She is not alone in this regard; the other businesspersons have also faced the same situation.

The number of people going abroad for foreign employment has been increasing lately due to the lack of employment opportunities and the failure of the industry to run fully.