Demand-Driven Approach

The market-led, integrated approach taken by MEDEP to promote micro-enterprises is by all indications a stunning success. One striking fact is that due to the advance market surveys, the enterprises created so far have no difficulty in marketing their products. This is in strong contrast with the common situation where donor assisted; production-oriented micro-entrepreneurs are unable to sell their products. Also important is the surprising sophistication of these new entrepreneurs regarding marketing strategies. Many have already actively diversified their products and market outlets. This bodes well for the survival and expansions of the new enterprises in the future.

The demand-driven approach is central to the implementation strategy of the programme where all programme activities are embedded on the potential and needs of micro- entrepreneurs and their markets. The starting point for all programme initiatives is thus based on the demand of the low income families to improve their sources of income and the demand of market for their products.

The demand-driven approach has two-pronged demand strategies, that is Interest and potential of the community to acquire the skills for enterprise development - the demand/needs of the target groups, market opportunity based on district potential - market demand, and resource potential including natural, financial, skills, etc.

Along the line of demand-driven strategy, the program has adopted the "Area Potential, Socio-economic and Market Survey" approach and "Selection of Programme Centres and Programme Locations". The selection of programme centres and locations focused on the spatial development approaches which is to say that following issues are considered:

Growth Corridor - The alignment of road has encouraged corridor development concentrating on population along the roadside. Concentration of population on these corridors has created demographic potential for developing micro-enterprises.

Rural Growth Centre - Rural growth centres encourage rural industrialization due to rural-urban linkages, demographic movements, and changes in the nature of demand and markets.

Resource Area - Location varies in terms of the nature, quantity and quality of locally available natural and human resources. Similarly, four main selection criteria are looked into while identifying programme location which are as follows:

Resource Potential
Development potential of the micro-enterprise sector is increased when the sector utilizes local resources not only in terms of employment but also mobilizing other inputs like raw material and dormant capital. Generally, rural regions export surplus agricultural and forest produce in raw form with little value addition, and import finished products. The development of micro-enterprise tends to reverse the process benefiting rural regions. Therefore, the resource potential of the possible project area is assessed in terms of its agriculture, forest, mineral and human resources.

Level of Functions
Settlements of different sizes and functions help diffuse innovations, generate new economic activities and stimulate social changes. Economic efficiency increases with the growth of the urban population. If there are no urban places near to rural areas, certain articulated settlements, in general, offer urban functions to their hinterlands. Range of services and concentration of economic activities in a settlement show its level of specialization. As goods produced in one community are assembled at some local collection points for distribution to consumers through markets, spatial centrality of the selected rural centres need to be assessed in terms of the degree of presence of such functions for the development of micro enterprises.

Demographic Potentials
The size of population, and its consumption pattern and effective demand are keys to the success of micro-enterprises. The occupational caste groups having traditional skills in the rural areas are mostly engaged in the traditional off-farm activities. The existing traditional skills of such groups and their concentrated settlements in certain locations provide opportunities for micro-enterprise development. Therefore, feasible centres are assessed in terms of population size and concentration of occupational caste groups.

Physical Integration
Better integration into the existing transportation system lowers the cost of production and facilitates the efficient movement of goods, services, information and technology. Therefore, the feasible centres are assessed in terms of their proximity to transport network and access to the next higher urban centre.

Programme intervention and entry are based on the thorough understanding and study of the resource potential, people's need and market demand for products and services. MEDEP intervention is focused on the intersection of these three broad areas as shown in the figure.




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