Struggling shop owners have put their businesses for sale to pay off their debts but there are no buyersIn Thamel, 270 travel and tour agencies, restaurants, curio shops and hotels have closed in the past three months.
Sunita Bagale and her husband Sudip Bagale couldn’t be more thrilled when they welcomed their second child, a baby girl, last week.
But now the couple has been hit by the reality of their situation: raising two children in the city amid mounting debt caused by the Covid-19 pandemic.
Sunita, who runs a cosmetic shop, in Lokanthali, closed her business after the government enforced a nationwide coronavirus lockdown. Her husband, Sudip, has also been out of work during this lockdown.
The couple, who hails from Lamjung district, has not paid the rent for their shop and room for the past four months and the tuition fee of their six-year-old son is also due. On top of that, they also have a loan that they took for Sunita’s hospital stay.
“I had taken a loan of Rs 50,000 to pay the hospital bills. The shop and room rents are also outstanding for the past four months, which amounts to Rs 60,000. And then there is another Rs 20,ooo that needs to be paid for our son’s school fees, which we had been unable to pay for five months before the lockdown,” Sudip said.
After much deliberation, the couple has decided to sell the shop in order to pay off their debt, but they have not received any buyers so far.
Sudip has placed ‘for sale’ posters in and around their neighbourhood.
“Nobody has contacted me,” said Sudip, who is well aware that selling business in the current financial climate is hard. Selling the shop is the only option the couple has in order to clear their debt and take care of their two children.
The Bagales aren’t the only ones who are trying to sell their businesses right now.
Hundreds of businesses, like cosmetic stores, beauty parlours, hotels, restaurants and bars, in the Kathmandu Valley are on the verge of folding due to the Covid-19 pandemic and subsequent lockdown. Their owners are now scrambling to sell their businesses so that they could pay off their rents and other debts. But buyers are not forthcoming.
“I have been trying to sell my business, but there are no buyers,” said Suresh Khadka, who owns a restaurant in Sundhara.
Almost all hotels and restaurants in Sundhara are closed right now and their operators are struggling to pay their rents.
“There are over 100 hotels and restaurants in Sundhara and they are all empty for the past three months. People do not come to stay in hotels and eat in restaurants due to the fear of coronavirus,” said Khadka, who is originally from Dailekh.
Khadka is planning to sell his business and return to his hometown.
“Once I have sold my business, I will use the money to pay the three month’s rent to my landlord and head back to my village where I plan to start farming,” he said.
Several other business owners who are planning to sell their establishments said that they simply cannot sustain any longer. Their debts are rising and they are not doing any business.
DSP Dhanapati Sapkota, head of municipal police at the Kathmandu Metropolitan City, said the effect of lockdown has been seen in almost all businesses, except for pharmacies, groceries and fruit and vegetable shops.
“Hundreds of shops have closed permanently and many shop owners are trying to sell their businesses because they are unable to pay their rents,” Sapkota said.
With the government relaxing the lockdown restrictions, shops and businesses are now open.
“But they are not doing much business to rescue them out of their debts,” Sapkota said.
In Thamel, Kathmandu’s tourist hub, the coronavirus pandemic and the lockdown have caused many businesses to pull down their shutters permanently.
According to Covid-19 Tourism Business Disaster Committee, formed under the Thamel Tourism Development Council, 270 travel and tour agencies, restaurants, curio shops and hotels have closed in the last three months.
“The tourism-related businesses in Thamel had given jobs to over a million people. They are now jobless,” said Bhabishwor Sharma, coordinator of the committee and vice-president of the council.
According to the council, Thamel area has around 10,000 businesses and they had been paying Rs 15,000 to Rs 4.5 million as monthly rent to their landlords.
“With the lockdown and no prospect of tourist arrival, many businesses in Thamel can no longer sustain,” said Sharam.
While the council has reached an agreement with the house owners in Thamel to waive off 50 percent of the rent to support the local businesses, there are still many business owners who still cannot remain afloat.