What We Do

It has been witnessed that micro-enterprises have become increasingly popular in the new development agenda across the globe and more so in the developing world to create income and employment opportunities. The programme's objectives and goals are to translate the broader vision of the government's Ninth Five-Year Plan, which is to try and address poverty through the development of micro-enterprises among low-income families. Our programme is a multi-partnership initiative between the state institutions and the private sector to promote micro-enterprises among the poor for economic empowerment.

Introduction

Nepal's economy is predominantly based on agriculture (34% of GDP) and provides livelihoods to approximately 70% of the population. Employment in the agricultural sector is seasonal and unemployment rate is above 40%. Nepal's rural economy has been hugely dependent on agriculture and in the last three to four decades, the country has been witnessing a rapid increase in population, while the growth in agriculture has remained unparallel. The agriculture sector grew by an average of 2.39 percent during the FY 1994/95 and FY 1998/99, which is slightly above the present rate of population growth of 2.27 percent. This has accentuated the incidence of poverty particularly in the rural areas. Lack of employment opportunities coupled with the alarming rate of population growth has resulted in the underutilization of between 40 to 60% of the adult workforce in Nepal.

To meet the economic necessities of the rural masses and in particular to cater to the needs of those living below the poverty line, the Government of Nepal and the UNDP entered into a technical collaboration to promote off-farm employment and income-generating opportunities. The partnership between the Nepal Government and the UNDP established MEDEP in July 1998 in 10 districts of Nepal, covering two districts each from the five development regions. Initially designed as a five-year programme, interest in the programme by funding agencies resulted in the extension of the programme for another four years to cover an additional fifteen districts until December 2007. With the success of the programme, MEDEP was extended for the third phase (2008-2013) covering additional 13 districts and thus reaching out to the hardcore poor  of 38 districts. See the map  for MEDEP's coverage during different phases.

MEDEP's impressive achievements led the Government in its Interim Plan to allocate $3 million to 45 districts and to gradually replicate the MEDEP model in the name of Micro Enterprise Development for Poverty Alleviation (MEDPA) across Nepal's all 75 districts. Eventually, in the fourth phase (August 2013 - July 2018), government’s MEDPA will gradually take over MEDEP’s role of creating and sustaining entrepreneurs and MEDEP will more focus towards capacity building of government line agencies and private organizations for the sustainable delivery of micro enterprise Development services. 
 

Objectives

The aim of the programme is to help low-income families become entrepreneurs, promote the development of their enterprises, and then create a strong partnership between consumers of micro-enterprise products and services and local service delivery institutions. This is expected to boost micro-entrepreneurs to create a new and dynamic business sector in rural areas of Nepal. The development aim of the programme is to contribute to the government's efforts to reduce poverty in the country. Its goals are two folds: one to reduce poverty among low-income families in rural areas, and the other is to ensure the institutional development and capacity building of local service delivery organisations to work as catalysts in the development of rural micro-enterprise sector. To give direction to the pilot initiative, the programme has set out with three distinct goals and objectives.
 

  • The main purpose of the project is to address the issues of rural unemployment and lack of economic opportunities for the poor. In this context, the programme had set out to establish 6,000 micro-enterprises between July 1998 to December 2003 during phase I of the programme. The programme exceeded the target. Likewise, during phase II, it had set a target to set up more than 13,000 micro-enterprises by December 2007. The objective of the programme is to help support the promotion of micro-enterprises on a sustainable footing.
  • In the process of creating income and employment opportunities, the programme's objective is to build the capacity of state and private institutions that provide necessary services required for setting up micro-enterprises.
  • The programme has set out to advocate for policy change and formulation which could support the development and strengthening of the micro-enterprise sector. Facilitating in creating policy conducive environment for rural economies to be linked to national private sector businesses is one of the core objectives of the programme.

Target Group

When the programme set out to implement its activities in 1998, its target group and beneficiaries were clearly defined to specifically include those living below the country's poverty line. According to the National Living Standard Survey those whose per capital income was less than 4,404 according to market prices of 1995/1996 were classified as people below the poverty line. With the progression of time, the figure was adjusted to 6,400 according to market prices of 2003/2004. Likewise, rural women were a sub-sector of the poor target group and MEDEP set out with an objective to have at least 70% women participation in its programme. The selection of the target group was within the larger framework of the United Nations Millennium Development Goals to reduce poverty by half by 2015. However, with the country traversing through political instability and conflict, the scopes of the programme's target group broadened. To act as a catalyst in the country's peace and development process, new target groups were identified under the UNDP's Crisis Prevention and Recovery (CPR) initiative. In addition to those living below the poverty line and women, the programme identified its new beneficiaries as the following:

  • Hardcore poor families (those having annual income of less than Rs 4,404)
  • Poor scheduled caste (Dalit - there are 26 different scheduled castes in Nepal)
  • Poor Indigenous groups (there are 59 different indigenous groups of which 12 are ethnic minority groups among which 8 have been listed as endangered ethnic groups).
  • Differently Able (physically and mentally challenged)
  • Deprived Women (divorced women, women-headed households)

Vision

Ensure that poor people have access to secure and easy financing and access to business development services




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