Forum

**Economic prosperity and well developed nation Nepal**

BACKGROUNDS
Before the disscussion of economic prosperity I just want to bring some global agendas and the strategic vision of policy makers of Nepal.In 2000 with the base data of 1990 Millennium Development Goal(MDG) with 8 development goals with certain indicators for 15 years and the time is passed away in 2015.Though most of the goals were achieved before earthquake but earthquakes must have pushed us back to the past.Now Sustainable Development Goal 2030 has rooted in the ground which aims to lower poverty to 5% within 2030.Booming banking sector for 1 karod to 8 arba journey was enourmous growth.China is also planning to establish its bank in Nepal . Its possible that the banking liberalization will increase the competition between Inian and Chinese banks in Nepal.

CURRENT CAPITAL Of GIANT BANKS IN THE WORLD
Currently we know World Bank,Asian Development Bank and Asian Infrastructure Investment Bank are the biggest bank.WB has the capital of $200 billions ,ADB has $150 billions and AIID has $100 bilions .

PREE CONDITIONS
# Political Esability
# Stable Government

CONDITIONS
# Closed Boarder
# Population Policy

STRATEGIES
# Full swing electricity prodution
# Quality tourism Policies
# Agricultural Reformations
# Industrial Development
#....
#....

OUTCOMES (within 20 years)
# Banks capital 50 arba
# Life Insurance 25 arba
# Non life Insurance 15 arba
#...
#....

CONCLUSION
Economic Prosperity and well developed Nepal.

How will be non life insurance

Its just my perspective and I disclaim any decision based on this!

BANKING SECTOR
At present the heighest number of investors and the biggest money is in banking stocks! For 20th century Nepal bank started its businss and now some KHARBS rupees covers the banking sectors.Having long histry and major portion of capitalisation in the capital market is covered by banks ie commercial and development.Many investors were profited through these banks while their paid up was very small, they do not forget the day when their 100 rupees reached to 9000 rupees,ie 90 times rise .Now they are dreaming the same,it it possible in bank?? Definately not! Because at the begnning those banks paid up must be below 50 karod!Are Nepali rich enough? Were they rich in the past? Definately not! Why SCB came from UK,HBL from Pakistan,NCCB,NBB from Bangaladesh,SBI,EBL from India,SANIMA,MACHHA from NRN etc.Bank having 20 ARBA paid up is possible to function in Nepal but who brings? There is earthquake/ flood in banks to reach paid up 8 arba by merger,acqusition and right,how can they extend money to 20 kharba.Besides few banks other banks are in middle point of journey of 8 Arba.If we select wisely.. there is space to make our investment 2-4 times within certain in banks.

HYDRO SECTOR
The great scope can be seen in hydro sector in Nepal. Our raw statistics shows that we can produce 43 thousands MW electricity through our rivers. Currently we are producing nearly 900 MW electricity but our demand is around 1500 MW.This is quite possible within 5/6 years.As electricity exceeds our current demand we will seek the alternative use of electricity and because of this our demand could be reached to 3000 MW if further economic prosperity it could be 4000 MW or more!After that....??? What to do our electricity ?? Time comes to sell electricity in big market like India ,China, Pakistan,Bangaladesh etc.As we did the BIPPA with India so we need to do with other countries. Will they buy our electricity at our cost?? definitely not!
Just see the terms and conditions what global contractor GMR ans SATALAJ did in case of Upper Karnali Hydro Project and Arun.Increase in operational cost due to foreign dependancy in raw material,specialst service and others but decrease in the unit cost of electricity for global market will have a negative impact in EPS of these hydros. But selecting hydro which are run by corporate management,promoters will definitely provide higher return.


MICRO FINANCE SECTOR
Still there are some spaces of booming micro finance coz the banks are not reaching remote area of Nepal. Due to micro services with geographic difficulties due to remote area and security problem..its difficult to extend banks in remote.Micro finance are showing EPS in three digits because of the hhigh spread rate. NRB could not lower the spread rate becoz,the economy at micro level is standing due to these micro finance ie particularly in farming/agricultural , local industry and so on. But hundress of micro finance are pipe line and in future days competition will sharply increase and this will lead sharply reduce spread rate and ultimately the EPS will fall sharply.Few years there is huge opportunity in micro finance to earn a lot .Micro finance will be high profitable till the date they will maintain current eps.

INSURANCE SECTOR
This is the only one sector which has miles to go.Just a baby step has begun!
For life Insurance...below 30 lakhs people have made their insurance though the demography shows that 3 karod .Below poverty line population around 23% ie around 70 lakhs.Suppose more 30% people are above around povery line who can not do insurance ie 90 lakhs.If other 20% do not like to insurance ie 60 lakhs.Now people left 80 lakhs..but policies are just below 30 lakhs...By the increasing economic prosperity and insurance literacy the life insurance sector has still to boom.
Besides certain drawbacks NON LIFE INSURANCE sector has not started to walk..BAME SARDAI CHHA. With the increase scope of banks,hydro,micro finance, hotel and other sector...the scope of non life increases.
Earthquake comes insurance increase
Accident happens insurance increase.
Riot happens insurance increases.
Projects come insurance increases.
infrastructure made insurance increase.
Thats why whether economic prosperity or crisis...in both condition insurance booms...
Happy Investment!!