Company Introduction, Business Environment Analysis, Technological Environment, Legal Environment, Regulatory Environment, Political Environment, Socio-Cultural Environment, Socio-Economic Environment, Globalization and International Laws, Conclusion.

1. K a t h m a n d u U n i v e r s i t y S c h o o l O f M a n a g e m e n t ( K U S O M )
S u b j e c t : S e m i n a r i n B u s i n e s s E n v i r o n m e n t
T e r m / T r i m e s t e r : M B A F i f t h T e r m
Ye a r : 2 0 1 8
Business Environment Analysis
Prepared By:
Dipesh Raj Pandey
Roll - 17321

2. COMPANY INTRODUCTION
• Name of the Hypothetical Company: Saral Pvt. Ltd.
• Product: Online Payment Platform (Payment Service Provider)
• Area of Operation: IT, Telecom, Utility, Money Transfer
• Objective: To reduce the use of cash transactions across the countryC

3. COMPANY INTRODUCTION
• Business Model
– Intermediary between customers and vendors
– Revenue model- Charge vendors for listing and selling
– Profit Plan- Profit from 4th year of operation
• Company Registration and Regulation
– Registration as per Company Act 2063 B.S.
– Facilitated by ICT policy 2072 B.S. (2015 A.D.)
– Regulation by NRB facilitated by NRB Act 2058 B.S. (2002 A.D.)
– Regulated under Payment and Settlement bylaw 2015 A.D.
– Income Tax Act 2058 B.S.

4. WHY SARAL?
• Huge scope
• Entire world moving towards a cashless economy

5. BUSINESS ENVIRONMENT ANALYSIS
• Technological Environment
– Major technological concern is security concern
– The average cost of data breach for 416 participant companies was
around $3.16 million (Ponemon Institute, 2017)
– SSL and Two Factor Authentication a must.

6. BUSINESS ENVIRONMENT ANALYSIS
• Legal and Regulatory Environment
– Registration of the company (Company Act, 2063 B.S.)
• Mandatory for an online payment platform to be registered as a
company in Nepal.
– As facilitated by ICT Policy of 2015, NRB regulates the payment
gateway
• Payment and Settlement System falls under NRB’s purview.

7. BUSINESS ENVIRONMENT ANALYSIS
• Legal and Regulatory Environment
– Preamble of NRB Act, 2002 A.D.
– Payment and Settlement Bylaw 2015 A.D.
• In NRB Act, it is stated that one of the objectives of NRB is to develop
healthy and efficient payment system within the country. This
statement facilitates for the development of this law.

8. BUSINESS ENVIRONMENT ANALYSIS
• Legal and Regulatory Environment
– NRB is planning to bring National Payment Gateway
• For monitoring of all the digitized payment systems and Real time
Gross Settlement System (RTGS) for real time settlement of large value
payments (Republica, 2018)
– 25% Tax to IT sector (Income Tax Act, 2058 B.S.)

9. BUSINESS ENVIRONMENT ANALYSIS
• Political Environment
– Alliance between CPN-UML and Maoist centre? (Political Stability or
Party Centered Politics)
– Companies cannot do much except hope for political stability
– Federalism can be a blessing for IT industry and payment sub-
sector
• If provincial governments show an active effort in the facilitation of this
sector.

10. BUSINESS ENVIRONMENT ANALYSIS
• Socio-Cultural Environment
– Total youth population in Nepal is 10,689,842 which is 40.3% of the total population (As per
2011 A.D census).
– Kathmandu valley (Kathmandu, Bhaktapur and Lalitpur) has the highest proportion of youth
population, i.e. 52.9%.
– Youths are early adopters of online payment technology.
– 63% Internet Penetration as per NTA MIS data of 2017 A.D. Another opportunity.
– However, Cash based payment culture can be a key hindrance. Low degree of
homogenization of online payment service.
– Saral will try to attract people to use its online payment services by partnering with E-
commerce sites, internet service providers and so on to offer lucrative discounts, schemes to
people who use its online payment services.

11. BUSINESS ENVIRONMENT ANALYSIS
• Socio-Economic Environment
– GDP per capita- $690 in 2012 to $730 in 2016 ( World Bank, 2016)
– Consumption driven Economy – Share of 89.7% of GDP in 16/17 as per Economic Survey
– Service Sector emergence – 56% of total GDP
• Globalization and International Laws
– Opportunity – Entire world is moving towards a cashless economy.
– Another Opportunity – Flourishment of Business Process Outsourcing (BPO) industry in a
developing economy
– Need to follow the principles of the SAARC payment Council, the principles of large value
payment system of Basel, and the principle of Payment and market infrastructure
committee of Basel
– For convenience, NRB while developing its Payment and Settlement Bylaw 2015 A.D. has
managed to include all such requirements.

12. CONCLUSION
• Online payment industry in Nepal is Just in the
infancy phase
• Payment and Settlement Bylaw 2015 has paved way
for development
• Market is increasing both from demand and supply
side.
– As far as supply side is concerned, where only 3
platforms were in operation up to 2012 , more than 67
firms have applied for the license for Payment Service
in September 2017 when the licensing requirement
was made mandatory by the Payment Systems
Department of NRB.
• Huge market for new entrants due to lot of youths
and 63% internet penetration rate (MIS report of
Nepal Telecommunication authority, 2017 A.D.)
• However in this industry, there are high risks (such as
security concerns) and low margins. Success is
completely dependent on mass penetration of the
market.

13. THANK
YOU