Last Thursdays with Ichhya Raj Tamang’: Summary of our gathering.

Dear 900 members of this group, Recently, we had an a gathering with Mr. Ichhya Raj Tamang as our guest speaker. Those of you, who came to the gathering, thank you!
This was jointly organized by Entrepreneurs for Nepal with the Samriddhi, The Prosperity Foundation.

Ichhya Tamang is the founder and the chairperson of “Civil Group”, one of the Nepal’s largest and rapidly growing business conglomerates –widely known for Civil Homes. He was born into a family in Okhaldhunga district of North eastern Nepal. His father served in the British Gurkha Army in Hong Kong for 9 years before being transferred to Singapore. Ichhya did his basic schooling in Allen South School where Nepali children received subsidies in education. He learned English and Malaysian language in school. He returned to Nepal to pass his School Leaving Certificate examination.

As a student of hydropower engineering in the then Soviet Russia, Icchya Raj Tamang had the first hand experience of the collapse of USSR and the economic hardship that followed in 1989. With the severe devaluation of Ruble, Ichhya dai who had been studying there on a scholarship found it hard to cope up with the rising prices of goods and the extreme devaluation of the russian currency. “So, I started business as a means of living. We used to call it our side business. Nepali students sold the Chinese goods they brought to Russians. After the collapse, the Russians were eager to develop their English Language Skills; we helped them to make money. My friends also brought 15 computers and sold them to Russians. Hence, we completed our studies from the profit of such ventures.That was the beginning of my career as an entrepreneur”, says Ichhya dai.

After returning to Nepal, he started working as an engineering consultant but the ongoing civil war made his job difficult. Not only him, but his friends were also facing similar problems. Convinced that business would be the only means of surviving in the times of such crisis, he formed a group of 12 engineers and stated Civil Cooperative which later developed into a firm called Civil Group. With its sound institutional growth, the group currently encompasses Real estate, Housing, Finance and Trading. The group currently operates Civil Homes Pvt. Ltd., Civil Merchant Bittiya Sanstha, Civil Saving & Credit Co-operative Ltd., Civil Business Complex Pvt. Ltd., Civil Trading Company Pvt. Ltd, Civil International Consultant Pvt. Ltd. The group also has a bank venture in its pipeline.
When Civil Group was first formed, banks and other financial institutions despite of having money didn’t invest much money in businesses like Civil Group. Civil Group introduced the housing concept for the first time in Nepal which was quickly followed by other business houses as well. Housing concept provided a great opportunity for the financial institutions to make profits. The success of housing concept saw financial institutions providing loans for not only housing but also for the purchase of other accessories as vehicles, land etc.

Civil Homes started its operation with purchasing 25 ropanis of land in Bhaisepati. The group bought the land but was in no position to build the house and sell. So, they made a computer animated ad and broadcasted on television channels. A house made within 4 anna and 3 paisa of land was priced at 22 lakh and 90 thousand.Civil Group started without much capital, without much expertise but has struggled and learned to create a good image of housing concepts among the public. And finally, housing concepts are treated as a necessity by the general public in Kathmandu these days.
In the second phase, the group bought 95 ropani of land in Kalanki and started building apartments. Ichhya dai goes on: there are two characters in housing: bungalow and high rise apartments. With the success of second phase, the group built a satellite town in Sunakothi. Sunakothi has its own mall, health posts, and cinema halls inside the colony. Currently, the group is working on its fourth phase which consists of 200 ropanis of land.

According to him, Kathmandu valley has a demand of more than 6500 new houses annually. Around 3 dozen housing companies are operating to meet the demands but they haven’t been able to build more than 2000 houses annually. Icchya adds, Nepal has no standard shopping centres. The closest to a shopping mall is Kathmandu Mall, one of the prime mall of the city was an office building made into a mall. So Civil Group is building a mall called ‘Civil Mall’ at the City Center with the state-of-the-art technologies with easy access and comfort to the customers that will meet the international standard.
Ichhya dai believes that with the sharp rise in the price of real estate, the value of land of Kathmandu is now comparable with those of Moscow’s.

Ichhya dai wants Nepalese to develop is a positive attitude towards credits and brokers. “In Western countries”, says Ichhya “People get born with credit and die with a credit. Credit is a normal phenomenon for them whereas in our society taking credit or loans is almost comparable to a crime. Elders bless us saying never to get into loan.” He believes it hampers business environment. Fear of credit prevents people from starting new ventures and participating in the economy. He cites himself as an example as he himself had borrowed loans from friends and families to invest I business. Brokering is a respectable position in the international context but a despicable one in our context. Brokers are very helpful in facilitating business transactions and are inevitable part of the economy but the negative connotation of their profession, “dalaal” is preventing brokers in our society from taking the profession properly and helping improve the economy.

The steady rise of private sector after the people’s movement in 2046 B.S has been a good thing. In the past, getting a loan of Rs. 2 lakh for housing was a next to impossible as banks used to provide loans to industries only and a housing loan would require the General Manager of the bank’s signature. He is currently working towards bringing a real estate act in Nepal which would protect the real estate business from whimsical decisions of the frequently changing governments of Nepal. He sees investors of real estate have great opportunities now as more and more people are moving to the cities and the value of land there is growing.
He believes the talks of global recession affecting the Nepalese economy are just rumors. The living standard of our people is too low to be affected by the global recession which is likely to have the primary effects on business on a much higher level than traditional Nepali businesses. In his words, “We are too poor to be affected by the recession.” Similarly, the talks that our remittance is going to decline holds no grounds given the fact that Nepalese are mostly engaged in low level, very essential jobs in foreign countries.

“People may find the situation insecure and think negatively about starting a new business. But I have seen 1989 in Russia and know how to survive acute crisis. If you work hard enough, you can succeed no matter what the situation around you.”

He claims that his group is among the top business houses in Nepal in regard to the volume of the tax paid.
When asked if Civil homes had done anything to address the issue of energy crisis that’s crippling the country, he answered establishing the housing concept in Nepal was his primary concern till date but as that goal has been fulfilled with dozens of players in the market already, researching new technologies and cost effective designs were the new goals for Civil Homes now. Civil homes have been using solar energy in its apartments and houses and are planning to incorporate the rain water harvesting technology as well.

“We are past the survival stage of business now we can afford to research and our goal would be to find more cost effective and energy efficient ways of making houses and apartments”.

When asked if there are easy ways for young entrepreneurs to get involved in the real estate business in Nepal; Ichhya dai points out, the real estate business boom has created a lot of support business and jobs. With the boom, qualified professionals and businesses will be needed for real estate evaluation, real estate marketing, real estate brokers; real estate legal professionals, graphic designers and animators, architects will be needed. Due to this, young entrepreneurs and professionals without much capital will also be able to participate in real estate business.

His secrets of motivating the staff ? An entrepreneur has to have the knowledge of all the aspects of his business and must know how the overall operation of his business runs. S/he needs to get involved in all aspects of his business in order to motivate his people. An entrepreneur needs to brainstorm and sort out works according to the strength of the people working for him/her. Equal participation and equal responsibility for every person involved is a good strategy for motivation. A starting entrepreneur should be able to work as jack of all trades, when the need arises.

Hope you enjoyed the summary.

courtesy: e4nepal.com