Post-earthquake Lessons for Improving Disaster Resilience of Cottage and Small Enterprises in Nepal: A Case Study in Kathmandu District

Abstract

Cottage and small industries (CSIs) play a key role in poverty reduction in developing countries by creating opportunities for self-employment and income generation. CSIs in Nepal are faced with tremendous challenges mainly arising from poor access to credit, limited market, traditional management practices, and less efficient technology. These challenges combined with the broad economic, social, and political challenges of the country make the CSIs highly vulnerable. During the 2015 Nepal earthquake, Kathmandu district suffered the highest damages and losses in industry and commerce sector. With many challenges already present to cope with, preparedness for earthquake was hardly one of the priority areas for the CSIs. The 2015 Nepal earthquake was a major earthquake to struck Nepal since 1934, and Kathmandu valley is less prone to flood and landslide hazards that are frequent in other parts of the country. However, business enterprises  in Nepal face frequent business disruptions caused by political unrest.  Cottage and small enterprises may have certain coping mechanism to minimize the indirect impacts of frequent business disruptions, which may have been helpful in coping with the earthquake impacts. The primary objective of this paper is to synthesize lessons for improving resilience of manufacturing cottage and small enterprises in Kathmandu district by identifying preparedness activities for earthquake and man-made hazards and assessing their helpfulness in coping with the 2015 earthquake impacts. The results show that informal social capital and maintenance of emergency fund helped the enterprises  in acquiring funds for recovery, while formal/organizational social capital, comprehensive preparedness planning (e.g., BCP), and earthquake risk mitigation measures improved their resilience.