Nepal | July 04, 2020

TOPICS : Micro-enterprise as a way of reducing poverty

TOPICS : Micro-enterprise as a way of reducing poverty
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Prem Sharma

More than 38 per cent of the total population of Nepal fall below poverty line. The people are far behind in development, although Nepal is full of resources. Basic infrastructure policies have not been well formulated and implemented by the government to bring the rural poor and the very poor communities into the mainstream.

Nepal is an agro-rural based country. Since we have 85 per cent of rural population, its contribution to GDP cannot be overlooked, and no strategy of socio-economic development can be successful if it neglects the poor. Thus rural development is crucial for Nepal. The government and other development stakeholders have prioritised rural development policies. Activities like poverty alleviation will remain a big challenge unless a concerted rural development programme and strategy are charted out.

Micro-enterprise development programme (MEDEP), started in 1998, is one of the programmes of poverty alleviation in Nepal. Its implementing agency is Ministry of Industry, Commerce and Supplies. The programme has been implemented in 20 selected districts across the country. It has several national and district level partners/agencies. The goal of the programme is to develop micro-enterprise for sustainable livelihood. At its initial stage, it has put stress on low-income families. MEDEP is designed to support the objective of Ninth and Tenth Five-Year Plans in which poverty reduction through the creation of off farm employment is the key goal.

Development of micro-enterprises also seeks to equally involve women and backward communities or socio-economically vulnerable sections of the people across the country. Developing countries like Nepal should put a stress on the small-scale entrepreneurship at the local level based on locally available raw materials or resources. The responsibility of the government is to create conducive conditions for this since micro-enterprise is an opportunity of exploiting local resources and encouraging creativity of the people at the local level.

The main goal of MEDEP is poverty reduction through micro-enterprise development. To accomplish these goals and objectives creation of sustainable micro-enterprise service delivery mechanisms and policy formulation on micro-enterprise development in coordination with ILO have been ensured. MEDEP is a demand-driven concept based on the need, interest and potential of the low-income groups, resource potential and market opportunities. It has been well recognised at the national and international levels. The concept of micro-enterprise has emerged globally to combat twin issues — poverty reduction and employment generation by producing basic goods and services. The micro-enterprises are generally unregulated and independent, largely family-owned, which employ low level skills and technology, and are highly labour intensive.

Innovativeness and successful approaches have to be built up for implementing such programmes. There are several hurdles that could be encountered during the implementation phase like lack of relevant laws, administrative management, policies and access to institutional credit services. For the purpose, linkages between banks, investors, and local organisation/community with a participatory approach are essential.

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