Cybersecurity Challenges in Small and Medium Enterprises (SMES) in Nepal

Small and Medium Enterprises (SMEs) are vital to the global economy and play a significant role in Nepal’s economic growth. However, SMEs in Nepal face critical cybersecurity challenges due to limited financial resources, insufficient skilled personnel, and low awareness of cyber risks. As a result, they remain highly vulnerable to threats such as phishing, malware, and ransomware. This study surveyed SME owners and employees in Nepal to investigate their cybersecurity practices and experiences. The results reveal that many SMEs rely on outdated technology, lack formal security policies, and provide minimal cybersecurity training to staff. Consequently, these businesses are frequently at risk of cyberattacks, which can lead to severe financial losses and even business closure. To address this gap, the paper proposes an E3-NSME cybersecurity protocol (Easy, Economic, Efficient) – a set of straightforward, cost-effective, and efficient measures tailored for resource-constrained SMEs. Recommended steps include basic cyber hygiene practices, affordable security tools, regular training, and leveraging government support. The findings aim to guide Nepali SMEs and policymakers in strengthening cyber resilience, thereby helping secure the nation’s SME sector in the digital era.