Rethinking Aid: The Risks of Reliance on State Funds
A case study of Nepal
The landscape of the Himalayas – with its soaring peaks and deep valleys – mirrors the journey of social enterprises in Nepal. The rugged yet tranquil region not only defines the country’s physical terrain but also symbolizes the complexities of investing for impact in social enterprises and their communities. In the same way climbers face daunting challenges and thrilling opportunities in the Himalayas, social enterprises in the country also navigate a rough path filled with obstacles and potential rewards.
In my own journey of working in the impact sector, I have seen first-hand how social enterprises have created significant impact in low-income markets like Nepal. Their work highlights the opportunities and challenges often encountered by those who dare to embark on a mission to generate social and environmental good. These are their stories:
For decades, tourism has been a major contributor to the growth in popularity of the Himalayas and the economic development of Nepal. Tourism in rural areas has yielded socio-economic benefits for low-income communities that would have otherwise received little support from the national government. However, touristic activities in remote regions can only be truly beneficial if the impact of commercialism is managed effectively and sustainably.
Photo courtesy of Fair Trails Himalayas
According to the World Travel and Tourism Council, Nepal’s tourism industry generated €2.2bn and created more than 427,000 jobs in 2017. By 2027, the industry’s contributions are expected to grow to €3.5bn, equivalent to 8.7% of Nepal’s GDP, while creating over 604,000 jobs.
Tourism, however, has had adverse effects on the environment – among them, pollution, the loss of wildlife habitats, and the increasing strain and depletion of natural resources. Moreover, the benefits reaped from touristic activities are seldom distributed equitably across social classes and communities.
To address this, venture catalyst group Ennovent, along with its partner, the Austria-based ecotourism agency Trail Angels, launched the joint venture Fair Trails Himalayas in 2021. Their mission is to manage trekking trails in the Himalayan region through sustainable tourism practices.
Welcoming the most adventurous trekkers, Fair Trails Himalayas not only generates income for villagers who partner with the trekking teams, but it also seeks to protect and raise awareness about the region’s wildlife, such as the endangered snow leopard, help conserve their natural habitat, and cultivate a deeper appreciation for the heritage, culture, and landscape of the region.
Photo courtesy of DOT Glasses
According to the World Health Organization, over one billion visually impaired people worldwide have no access to prescription eyeglasses. Yet, the use of eyeglasses has been shown to improve the learning outcomes of children, increase workers’ productivity, and boost their income by 20% to 25%.
Catering to low-income markets, global eyewear startup DOT Glasses delivers cost-effective eyeglasses with adjustable frames that can easily be dismantled and reconstructed piece by piece. The modular eyewear design allows for the long-term use of the glasses, minimizing the need to replace an entire pair if a component of the frame is damaged. The group also offers vision testing tools to the base of the pyramid.
Since 2017, the non-government organization Partnership for Sustainable Development Nepal has been collecting and recycling plastic waste from the Langtang National Park of Nepal. While promoting eco-friendly trekking and tourism in the Langtang region, the PSD Plastics project also strives to minimize the environmental damage arising from the influx of 18,000 visitors to the area each year.
On average, the NGO cleans and recycles 40,000 PET bottles monthly as part of a closed-loop circular economy resource management process. From the plastic waste collected, the PSD Plastics project designs, manufactures, and markets economically viable products.
The pilot project was initiated in 2022, producing items such as flower pots, tea coasters, garlands, bowls, and souvenirs for domestic and overseas markets, and facilitating grassroots participation in circular economy practices.
A critical aspect of empowering social enterprises in Nepal is promoting sustainability and leveraging community support. These efforts prove the importance of establishing business models that generate profit and contribute to environmental and social good. This entails strengthening partnerships and fostering innovative practices, as seen in the cases of Fair Trails Himalayas, DOT Glasses, and PSD Plastics.
With a focus on sustainable business practices, empowering social enterprises in underdeveloped countries like Nepal can help improve the quality of life for local communities while establishing financially viable ventures.
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