An Empowered Entrepreneur: How a $200 loan turned into multiple successful businesses

Born into a poor family in Ambasa village, Kailali district, Karishma Chaudhary, 23, is now a successful entrepreneur. But her entrepreneurial skills were honed over a lot of hard work and through sheer determination to lift herself and those dependent on her out of crippling poverty.
Ambasa is an underdeveloped village due to its location in the relatively backward far-western region of Nepal, an area that is only now starting to get access to basic facilities. To add to such geographical challenges, Karishma is from the Tharu community, a native, conservative ethnic group that is communal and has strict rules about how it functions.

Karishma’s family financial condition wasn’t strong when she was growing up. She could not continue school beyond the 5th grade. Then, at 13, Kalpana was married off by her family to Raj Kumar. With a new family of 7 members and little to no means of managing its daily expenses, her married life was always stressful. The family was also struggling to manage Raj Kumar’s and his siblings’ school costs.

Not only did the family have limited income, it also did not have an environment where they could even discuss the possibility of starting a micro-enterprise to turn things around. Starting any enterprise required money which they didn’t have, and they didn’t have a basis on which money lenders or even banks could provide them a loan. There were also no banks in the area they could go to, to inquire about getting a loan. Even with a bank, Karishma’s famly had nothing to use as collateral to apply for a loan. In case of medical emergencies or accidents, she and her husband would be forced to borrow at high rates from money lenders. Paying back these loans would become an additional burden, worsening their indebtedness and inserting them into a vicious poverty cycle.

In June of 2008, Karishma enrolled herself as a member of a UNYC Nepal supported Makhmali UNYC Women’s Borrowers Group. The group is supported by UNYC Nepal’s branch in Tikapur municipality; the branch is supported by Sakchyam, a UKaid-funded access to finance programme. Through menial labor work, Karishma worked hard to make ends meet at home, and at the same time, made small savings at the borrowers’ group she had taken a loan from.

After receiving training on beginning different kinds of micro enterprises, Karishma was inspired enough to give it a shot. Soon after, she built up the courage to get her first loan of NPR 20,000 ($200) without having to put any collateral. She used the money to open up a small gift shop. With hard work and perseverance, as her earnings increased, so did her capability for improving her work. She then applied for and used larger loan amounts. For her 8th loan, her family took out NPR 40,000 ($400) to open a small lodge beside their gift shop.

With improved capacity and confidence, Karishma and her family then applied for collateral-free micro-enterprise loans of NPR 60,000 ($600), then NPR 90,000 ($900) and then NPR 150,000 ($1500) to invest further into their gift–cosmetic products shop and lodge. Today, Raj Kumar looks after the shop while she tends to customers at the lodge.

From their enterprises, the family has a daily income of close to NPR 15,000 ($150), of which NPR 3000 ($30) is net profit. Karishma has more than NPR 32,000 ($320) in their savings account opened with UNYC Nepal.
From struggling to manage daily expenses to operating two successful enterprises, Karishma’s life has seen a remarkable transformation. The income from their enterprises now sustains the family’s daily expenses, medical expenses, and covers the education for her children. Part of their income goes toward paying back the loan in installments as well as into savings. As a result of this, Raj Kumar, has not had to travel away from the village or abroad for work, as is very common for men in the region.

Today, with her husband and a daughter, Karishma has a family of three of her own. Her daughter is studying in a good school too.

The couple credits UNYC Nepal for bringing about this change in their lives. “When we wished to start an enterprise, UNYC Nepal made this possible. It helped us invest in our work and allowed our business to grow. Without their support, we would not have been able to come this far, mainly because we did not have any collateral to apply for loans,” said Raj Kumar.

“After becoming a member of UNYC Nepal, I came to understand the importance and value of being an active member of a community. It allowed me the confidence to do something of my own. With this confidence we have been able to turn a business that started with a NPR 20,000 ($200) loan into an enterprise that has brought in more than NPR 10,00,000 ($10,000),” said Karishma, adding, “I am so grateful toward UNYC Nepal for all that it has brought into my life. I will always be a member of the institution and will always encourage others to join and make something of their lives.”