Small & Medium Enterprises Generate Highest Profit in Nepal

May 19, 2020 | Investopaper

According to the Central Bureau of Statistics, small and medium enterprises have the highest profit among the businesses operating in Nepal. The final results of the economic survey conducted by the Statistics department in Baisakh 2075 have announced such a fact. The average annual profit of small and medium enterprises is 34.6 percent. The study concludes that the average annual profit of a medium enterprise is 31 percent and the average annual profit of a large enterprise is 21.4 percent. Such a conclusion has been drawn on the basis of a survey conducted by the department among 9924 businesses across Nepal.

The survey has shown that these enterprises across Nepal have sold services and goods worth Rs 2.915 trillion. These enterprises have made a total profit of Rs 853.21 billion from the sale of services and goods.

1 to 9 people involved are defined as small, 10 to 49 people involved as small, 50 to 99 people involved as medium and more than 100 people involved as large. The survey has shown that a small enterprise sells 1 million 84 thousand services and products annually. These enterprises make an annual profit of 375,000 rupees from the sale of this amount.

The study concludes that small enterprises sell services and goods worth an average of Rs 178.90 million annually and make a profit of Rs 61.84 million. Similarly, the medium-sized business sells services and goods worth an average of Rs 140 million annually and makes a profit of Rs 43.3 million. Likewise, the big businesses sell services and goods worth an average of Rs 660 million and make a profit of Rs 141 million.

According to the study, the average sales of a business in all four categories according to size will be 3.236 million annually and the average profit will be 9.47 million. Medium business accounts for a large share of the annual production of services and goods in Nepal. Big business accounts for about 38 percent of sales of goods and services. Small enterprises, on the other hand, have a 32 percent stake. The share of small scale industries is about 21 percent and the share of medium scale industries is 9.5 percent. But their profits vary from share to share.

The economic survey has shown that out of 923,000 enterprises in Nepal, 462,000 enterprises are registered. This is 50 percent of the total business. Similarly, the survey has shown that 460,000 businesses are not registered. About 30 percent of these businesses are managed by women. The study also showed that 54 percent or about 500,000 business managers are under 40 years of age. 54.5 percent of the enterprises are run by youth. 1.2 percent of the operators are foreign nationals. About 47 percent of businesses are in their own building or room. About 50 percent of businesses operate in rented buildings and about 4 percent on roads. Out of the total business, 52 percent do not have business statistics of their business.

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