Nepal’s Position: Women, Business, and Law 2023

In 2010, the participation of women in the Nepali labor force was 23.6%. A key indicator of progress in women’s economic empowerment is active labor force participation, in 2022 it rose to 28.6%. Additionally, the total waged and salaried women increased from a mere 8.31% in 2010 to 12.1% in 2019. These data reveal notable milestones for women in Nepal which is emerging in legislative frameworks as well. For instance, the National Civil Code of 2017 was tuned to ensure equal property inheritance rights for both genders and condemns discrimination in wages and social security. Moreover, the Labor Act 2017 encompassed equal pay for the value of work for both genders. Over the years, such reforms and policies have played a pivotal role in fostering gender equality, and Nepal has taken significant strides in this regard.

Since its inception in 2008, the Women, Business, and Law Report has become a key resource for analyzing women’s rights and gender equality in 190 economies worldwide. Among these, Nepal stands at a promising position, having implemented an impressive total of 16 substantial reforms in a mere 13-year span. These reforms have not only propelled Nepal forward but also set a powerful precedent for the entire region. However, while the status of women in Nepal has improved significantly, it is essential to recognize the broader challenges on the path to global gender equality. The Women, Business, and Law Report estimates that despite ongoing reforms, it may take half a century for gender equality to permeate every corner of the world.

The Women, Business, and Law (WBL) Index is calculated through 35 questions scored across 8 indicators which include mobility, workplace, pay, marriage, parenthood, entrepreneurship, assets, and pension. Each indicator represents significant factors that impact a woman’s well-being and status in society. To calculate the WBL Index, the unweighted average of the answers from the questions is computed, with results being scaled to 100. Subsequently, the overall average is used to determine the final score, the maximum being 100.

Figure 1: Nepal’s Women, Business and Law Score Trend

Source: Compiled by the author using World Bank data

Nepal’s outlook towards women has witnessed many transformative changes which have resulted in the improvement of the socio-economic status of women. The gradual changes in Nepali society have led to the country positioning itself at a mere 49.4 in 2015, 55.6 in 2018, and moving to 80.6 in 2023 in the Women, Business, and Law score. The positive trajectory is a result of amendments in policies and provisions that improve and expand women’s access.

Adding on, if compared with other South Asian countries such as India, Bangladesh, and Sri Lanka, Nepal has managed to score 80.6, the highest among the four. This is possible because of Nepal’s promising move towards the introduction of pertinent reforms related to parenthood and pension in the past years. Two key discussions related to women in the workforce and their access to finance have been expanded on below.

Women in Workforce

An analytical report on ‘Women in Business’ by the Central Bureau of the Statistics in 2021, revealed there are 29.6% female managers compared to that of 70.3% of male managers. This could be because women, on average, attain lower levels of education compared to their male counterparts and are more prone to dropping out of the workforce after marriage and parenthood. Many have pointed to unequal distribution of household labor and societal expectations as reasons for not being able to balance professional and personal lives compared to their male counterparts.

Women in Nepal have been found to earn less than their male counterparts. In the same line, while women earn NPR 12,000 per month, men earn NPR 23,800 per month in the ‘professional’ category. Moreover, women are often found hesitant to negotiate for their salary, due to their perception of the social environment. Women recognize that advocating for higher pay poses greater social challenges for them compared to men, leading to a nervous feeling about engaging in negotiations.

To address the gaps, in 2002, equal rights were guaranteed to spouses for immovable property. Along the same line, more reforms came in through the Labor Act in 2017, enabling women to work at night and equal remuneration for work of equal value. The same act was amended for discrimination in employment based on gender.

The disparity in access to finance

Male account holders in banks outnumber female account holders by two to one, as per the Nepal Rastra Bank’s Financial Access Report 2021.  A total of 19.11 million of the 29.92 million account holders in banks and other financial institutions are men, compared to 10.61 million women.

Furthermore, a World Bank report in 2020 revealed that businesses are registered in the name of women due to the government subsidies provided to them. Moreover, the covid pandemic grappled the world in 2020, affecting women in entrepreneurship. According to the WBL 2023 report, women-led businesses were hit hard and were twice as likely to get rejected if they applied for loans. In Nepal, women entrepreneurs faced a difficult time repaying loans and stay afloat, ultimately forcing them to quit. Concessional loans at 5% were provided to micro and medium enterprises, and women returning from foreign employment in the year 2021-22. While the number of women taking loans was following an increasing trajectory, many experts presumed that men took advantage of the facility as women had other underlying unpaid responsibilities.

In 2008, women were allowed to be the head of households, and amendments in legal provisions for women relating to inheritance and employment were also carried out. Furthermore, the government has introduced initiatives like the Women Entrepreneurship Development Fund, providing collateral-free loans at low-interest rates, and the Micro-Enterprise Development Program (MEDEP), now implemented by provincial governments.

Conclusion

Overall, Nepal demonstrated an improved scenario in the World, Business, and Law Index, even when compared with other South Asian countries. Women make up more than half of the population in Nepal, making it crucial to achieve gender goals not only at the household level but in a way that positively contributes to the resilient and sustainable growth of the country. With reforms introduced through different periods of time, Nepal is slowly but steadily climbing the index ladder.