Impact

Impact

The programme's activities had a direct economic impact; firstly on the target beneficiaries and secondly on the local economies in the ten implementing districts during phase I. Even though the impact was directly related to economic and income generation, there was a chain effect which rippled down to each member of a family supported by MEDEP. The chain effect of the economic impact was such that economic aspect was overshadowed by the improvement in the living standards of the beneficiaries in terms of meeting basic social development indictors as a result of the impact on people's income. The programme hopes that impact of the programme on the lives of poor people will help policy-makers understand the role, contribution and importance of the micro-enterprise sector in reducing poverty in Nepal.

Increased Family Income

One important purpose of MEDEP was to significantly increase the income of the poor people. As one indicator of success regarding incomes, MEDEP has compared the participating entrepreneur's family per capita income before MEDEP with the net income (revenues minus all non-family-labour costs) of the resultant micro-enterprise (not including any other income that the family may still be earning). The average MEDEP micro-enterprise then provided 56% more per capita family income than the family was receiving before MEDEP. The percentage increase in family incomes is similar for Dalits, Indigenous Nationalities, and ultra poor; however their enterprises are smaller than those of other MEDEP entrepreneurs.

Interestingly, the socially excluded Dalits and Indigenous Nationalities have performed well in terms of the increase in family incomes as a result of their participation in MEDEP. On average, they start from a smaller base salary, resulting in larger increases percentage-wise. Nonetheless, such rapid increases in family income among the very poor and disadvantaged can often have very significant impacts on their lives.

Although the average increase in family per capita income is 56%, it is important to note the differences. The following situations appear to affect performance. The percentages of entrepreneurs experiencing higher increases in income were greater among the Phase 1 entrepreneurs than with the Phase II and Phase III entrepreneurs who have only recently begun their enterprises. The tables below show that only about 10% of the Phase II entrepreneurs show a family income change of over 50%. (And this calculation does not include those that have not been in business long enough to report an annual post-MEDEP income.) On the other hand, the table of Phase I entrepreneurs shows that about 85% are above the 50% mark in terms of increase in per capita family income.

Impact on Women's Position

Women entrepreneurs report that they have been able to raise their status and identity inside and outside their household, and strengthen their role is household decision-making. The majority of the women entrepreneurs interviewed stated that their income generally goes for better food, clothing, education for their children and other household expenses including their children's marriage. Despite the programme target to have 70% women participation, women lagged behind their male entrepreneurs in their rate of family income growth (average increase 48%). This could be attributed to a large number of part-time enterprises managed by women. However, the fact that a greater percentage of women recently begun new entrepreneurs, and because women faced more problems than men in travelling during conflict situations.

A small in number but highly successful women entrepreneurs are the single women, either widow or abandoned by their husbands. These groups of women have employed 2 -23 people. They have scaled up their enterprises, constructed houses, provided education to their children. Women who have had low self-esteem have become economically empowered, are at decision-making, have a higher standing in the community and a sense of solidarity. A large number of the women are operating home-based enterprises in a slow but continued mode due to their family responsibilities.

Programme's Efficiency

The MEDEP integrated approach, combining entrepreneurship training, technical skills training, micro-finance access, market linkages, and considerable on-going advice and encouragement to new entrepreneurs have significant upfront costs. However, MEDEP's reliance on Enterprise Development Facilitators who are locally resident, its consolidation of some management functions from the 20 MEDEP districts to five Area Programme Support Offices (APSOs), and other cost-efficient strategies helps minimize the expenses, even for a complex project. Most important is that the costs are offset by the low drop-out rate among MEDEP entrepreneurs that results in a relatively low "unit" cost. The average cost of US$ 425 (Rs 28,000.) per MEDEP entrepreneur is quickly surpassed by the value of the annual increase in the entrepreneurs' income.




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