Nepal has climbed two spots in the World Bank’s Doing Business 2018 ranking to 105 after undertaking reforms in two areas: strengthening access to credit and protecting minority investors. Nepal was placed 107th in the multilateral lender’s Doing Business 2017 index.

Despite an improvement in the overall ranking, Nepal’s ranking among South Asian countries has slipped to third place behind Bhutan and India. Bhutan is ranked 75th in the latest global Doing Business index. 

India secured the 100th position and Sri Lanka is ranked 130th followed by Maldives (136th) and Pakistan (147th). The lowest ranking countries in South Asia are Bangladesh (177th) and Afghanistan (183rd).

“A total of 20 reforms making it easier to do business were implemented by six of the eight economies in South Asia in the past year,” the World Bank said in a statement. “This is more than double the region’s annual average of less than nine reforms over the past five years.” 

Strengthening access to credit has been one of the major reforms done by Nepal. Nepal strengthened access to credit by operationalizing the existing law on secured transactions that implements a functional secured transactions system and establishes a centralized, notice-based, modern collateral registry, according to the report. 

With the Secured Transaction Registry Office commencing operations, any individual or firm can provide credit against movable assets as security. This means any individual seeking a loan from now onwards will not necessarily have to visit banks or other financial institutions, as the government has allowed anyone to extend credit against any movable asset as collateral including cars, mobile phones, wrist watches and even crops and livestock. 

Similarly, Nepal strengthened minority investor protection by requiring greater corporate transparency.

Besides climbing up global rankings, Nepal also improved the business regulatory environment with its score in the Distance to Frontier sub-index increasing to 59.95 from 57.60 a year ago. 

The score on Distance to Frontier measures the regulatory performance with the ‘frontier’, or economies that have performed the best on each of the indicators. 

This measure shows how close each economy is to global best practices in business regulation. A higher score indicates a more efficient business environment and stronger legal institutions.

Doing Business Ranking 2018

Country 2017 2018 South Asia Ranking (2018)

Afghanistan 183 183 8

Bangladesh 176 177 7

Bhutan 73 75 1

India 130 100 2

Maldives 135 136 5

Nepal 107 105 3

Pakistan 144 147 6

Sri Lanka 110 111 4