Service Delivery Mechanism

Many income generating programmes have been executed in Nepal. Some programmes have been credit-driven and rely exclusively on the provision of micro-credit. In this approach, credit provision works out on feasible projects. This approach assumes that credit is the most powerful stimulant of micro-enterprise creation and thus a very little attention is given to the subsequent technical assistance to the borrower.

Some programmes are training-driven. Even though training is a necessary condition to start a micro-enterprise, it is not sufficient to take up micro-enterprise as a business. There were needs of subsequent services on non-technical matters like financial management, access to raw materials and credit, and so forth.

Some programmes rely more on social mobilization for the creation of micro-enterprise. However, they must be connected with the rural market system for income generation. From the lessons learned from different approaches of micro-enterprise development, it has been proven in many parts of the developing world that market-led approach to micro-enterprise development combined with the sequenced delivery of an integrated package of training and services is the most effective way to create enterprises. However, it has not previously been widely applied in Nepal, and MEDEP is a pilot programme to test the applicability of this methodology in rural Nepal. MEDEP has adopted a well-integrated approach in sequencing a set of services in micro-enterprise creation. MEDEP has demonstrated that the approach works to create micro-enterprise. The sequencing of activities and services promoted as part of its strategy is as follows:

Sequencing of activities and services:

  • Market analysis
  • Entrepreneurship training and entrepreneurial competency development
  • Skill training and technology transfer
  • Credit (if required)
  • Appropriate technology and product development
  • Quality control and compliance to rules and regulations
  • Market promotion and business counseling
  • Regular follow-up
  • Monitoring and evaluation

The key features of MEDEP in delivering its services are as follows:

  • Community Mobilization: Community sensitization (information sharing - PRA), Target participant Selection, Group formation (potential entrepreneurs), Group promotion.
  • Enterprise Creation Methodology: The approach to micro-enterprise development is based on the needs of the market combined with the sequenced delivery of different components - community mobilization, entrepreneurship development, skill training, micro-credit, appropriate technology and marketing linkages. In previous programmes, similar elements adopted were mainly piecemeal, fragmented and implemented in isolation. Entrepreneurship development, technology and business counseling were often not integrated. The net result was often ineffective and expensive.
  • Implementation point of Entry: The programme's point of entry is focused on districts where the DDCs have already instituted a district planning and development process with the support of successful decentralization programmes. The DDCs, as the elected apex local bodies, have a compelling interest in ensuring that enterprise development support activities are continued within the jurisdiction and framework of the Decentralization Act, 1999.
  • Institutional Delivery Mechanism: The programme avoids creating new institutions but rather seeks to make maximum use of available national institutions, public and private, that already exist. The rational in using existing institutions was to demonstrate that the district level partnership approach can be effective in utilizing existing institutional resources to deliver the components necessary for micro-enterprise development.

The existing public and private sector district-level organizations, under the coordinated guidance of the DDCs, have proved that the programme has been able to deliver the needed services to both new and existing micro-entrepreneurs. Participatory planning processes have been initiated in all districts to establish functional partnerships among implementing partner organizations and create synergistic effects for sustainable micro-enterprise development.

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