NEPAL

Microenterprise Development Programme has pioneered a model that supports the rural poor, women, youth and people from marginalised groups to create and run micro-enterprises. The government is adopting this model for its micro-enterprise support programmes.

Background

Over 80% of Nepal's population live in rural areas. The lack of income-earning opportunities in these areas is a central cause of the widespread poverty and worsening food security in the country. It also forces ever more Nepalis to leave home to seek work in Nepal's towns and cities, in India and further afield. The sustainable development of Nepal's villages depends on generating many new local jobs, especially for the rapidly growing number of young job seekers. The Government in its Three Year Interim Plan (2007-2010) calls for creating 100,000 new jobs in small scale enterprises in part due to its importance in removing a major grievance that fuelled the conflict - the lack of job opportunities in rural areas.

The project

The Micro enterprise Development Programme is creating employment and income opportunities for the rural poor by:

Providing skill and business training and other support, mainly for women and poor and disadvantaged people to set up micro-enterprises;

Helping establish business support services and representative organisations for micro-entrepreneurs; and

Working with the government to improve the policy environment.

The Programme works in 38 districts including in the Bhutanese Refugee Camps and adjoining communities in eastern Nepal. It also assists local government bodies and the Minsitry of Industry's line agencies in a further 13 districts to provide micro-enterprise development support.

Since it began, MEDEP has developed over 32,000 micro-entrepreneurs (68% women, 20% Dalits and 67% youth) and created about 37,000 sustainable jobs. Eighty percent of MEDEP enterprises continue to do business - a high success rate that reflects the strength of this programme. The average MEDEP micro-entrepreneur earns over twice what they earned before coming into contact with the programme. MEDEP has established business support service organisations in all its 31 districts. These are providing a very useful service and are likely to continue as the ex-MEDEP staff that run them earn a good living advising entrepreneurs. The programme has also helped establish micro-entrepreneur associations that now serve their members and are the focal point for the Government and donors to keep in touch with the progress and needs of this sector.

Technical support to the Government helped it produce its Micro Finance Policy, 2007 and its Micro-Enterprise Policy, 2008. These make it Government policy to 1) provide easier access to finance for poor rural people and 2) to enable micro-enterprises to register as formal businesses. At the district level the programme has supported local governments to implement the MEDEP model and small businesses to access district enterprise development funds.

MEDEP's impressive achievements led the Government in its Interim Plan to allocate $3 million to replicate the MEDEP model across all Nepal's 75 districts. Its achievements also led to it being highly commended in the International World Business and Development Awards, 2008.


Project details
 

Project partners

Implementing agency: Ministry of Industry, Commerce and Supplies

Government implementing partners: Ministries of local development and forests, district development committees, Department of Cottage and Small Industries, Cottage and Small Industries Dev. Board

Private sector and civil society implementing partners: Federation of Nepalese Chambers of Commerce and Industry, Nepal Young Entrepreneurs Forum, business houses, micro-finance institutions, Federation of Cottage and Small Industries, the District and National Federations of Microentrepreneurs and Cottage Industries

UNDP's role: Main donor and providing technical assistance and capacity building support

MEDEP's importance to achieving the MDGs:

Reduces poverty and hunger (MDG 1) by increasing the incomes of poor rural households.

Promotes gender equality and empowers women (MDG 3). Eighteen of the 25 district micro-entrepreneurs group associations and 14 of the 31 business development service providing organizations promoted by the project are headed by women. Most of the project's new women entrepreneurs have a strengthened role in household decision making.

Improves school attendance and the health of women and children as women's incomes go mainly on better food, clothing, and education for their kids and to pay for health care (MDGs 2, 4, and 5).

Promotes environmental sustainability (MDG 7) by working with forest user groups for the sustainable harvesting of forest products and by promoting environmentally-friendly enterprises.

For more information:

the MEDEP office at (00977-1) 5541949 or 5541951
www.medep.org.np

Contact