The Government of Nepal (GoN) and the United Nations Development Programme (UNDP) jointly implemented micro-enterprise development (MED) since 1998 with the overarching goal of reducing poverty, by creating Micro-Enterprise Development Programme (MEDEP). Fostered by the Australian Agency for International Development (AusAID), the program epitomizes social inclusion, sustainable development, and multi-stakeholders' initiative to fight poverty.One of the longest-run and the most effective programs executed by the GoN and the UNDP, the MEDEP stipulates a mandatory participation of 70 percent women, 30 percent Dalits, 40 percent indigenous nationalities, and 60 percent youth. The compliance of this provision speaks of the efficacy of the program.
It has produced 73,515 entrepreneurs so far who produce more than 222 types of goods and services under seven broad categories: forest, agriculture, service, artisan, construction, tourism, and information and communication technology (ICT), using the local resources sustainably.
MEDEP has added a new vocabulary, laghu udyam, to the Nepali lexicon. Its perseverance led the GoN to: formulate a Micro-Enterprise Policy 2007; draft Riverbed Farming Policy; and include micro-enterprise as a distinct category of industry in Industrial Policy 2010, for instance.
It has created several institutions at different levels including more than 4,000 Micro-entrepreneurs' Groups at settlement level to National Micro-entrepreneurs' Federation of Nepal, and the association of Business Development Service Providing Organizations (BDSPOs) to name a few.
Self-employment and job for others has economically empowered the marginalized people and contributed to stem capital flight and exodus of youth. For example, youths of Dahal Gaon in Kavre of Dolakha, have been farming vegetables profitably after returning from India.
The informed choice of the entrepreneurs in cultivating organic vegetables has far-reaching consequences. This has safeguarded farmers and consumers from being poisoned, slowing the deterioration of soil fertility, and environmental degradation.
Women's access to and control over productive resources has increased. They occupy 64 percent of decision-making positions in 38 District Micro-Entrepreneurs' Group Associations and 50 percent of executive positions at BDSPOs. Changing gender roles, women's meaningful participation in politics, and society, and men doing the household chores are the tip of the iceberg of women's empowerment.
This program directly contributes to five of the eight Millennium Development Goals (MDGs): 1) Eradicate Extreme Poverty and Hunger; 2) Achieve Universal Primary Education; 3) Promote Gender Equality and Empower Women; 6) Combat HIV/AIDS, Malaria, and Other Diseases; and 7) Ensure Environmental Sustainability, according to a 2010 independent Impact Study of MEDEP.
The fact that 73.1 percent of the participant households have moved out of poverty is a strong evidence of its success. And it will contribute to attaining the Sustainable Development Goals (SDGs), an improvised continuation of the MDGs, aimed at helping the poor to come out of poverty in the post-MDGs period.
Economic independence coupled with social acceptance forms the bedrock of empowerment of the poor and marginalized people. Begun amid the escalating decade-long armed conflict, the program boosted the local economy crippled by the insurgency, and contributed to mitigate the conflict.
Micro-enterprise has contributed to offset trade deficit by exporting goods, promote Nepal in the international market, create sustainable economic base, and substitute import, thereby laying the foundation for sustainable development. Hence, it is the best tool to attain the SDGs.
The program has enabled the majority of unschooled entrepreneurs to benefit from the ICT. Uneducated farmers in remote parts of Baitadi district can surf the Internet and find out the price of their products at domestic and international markets, thanks to the introduction and expansion of e-commerce.
The impact study also shows that increased and steady income of micro-entrepreneurs has spared the scarce financial resources of the state as a growing number of people have been sending their children to private schools. They have also boosted the economy by operating more than 4,000 savings and credit cooperatives.
Many challenges remain, nonetheless. Securing enough funds to expand the program across all districts is a major one. Marred by the prolonged armed insurgency, ensuing political instability and smoldering violence, the GoN has been unable to allocate adequate fund to implement MEDEP as Micro-Enterprise Development for Poverty Alleviation (MEDPA).
Some traditional enterprises like iron works and shoemaking face increasing threat from the Chinese and Indian markets. Weaving Dhaka clothes, and making incense sticks are most likely to lose their competitive edge due to monopolistic price of raw materials in the Indian market and the 'me-too' practice.
Commercial banks do not consider the micro-entrepreneurs bankable and the exorbitant interest rates with compulsory collateral charged by cooperatives have constricted the entrepreneurs' access to finance, capping their potential growth. Dearth of skilled human resources like enterprise development facilitators, sectoral experts, monitoring and evaluation officers, quality assurance officers, and government employees to facilitate and oversee the expanding program are other challenges.
Broadening the funding base sustainably is urgent. The GoN, the UNDP and AusAID should pool fund to ensure smooth operation and expansion of the program. If the program suffers, attaining the SDGs will be impossible. The GoN should prioritize MED and allocate sufficient budget annually.
The state should provide soft loan to micro-entrepreneurs with a tax holiday of five years. Micro-entrepreneurs' organizations should be strengthened to promote and protect their products and services and their rights. We should start diversifying and exploring new and niche markets within and outside the country to ensure the sustainability of the enterprises.
Taking advantage of the inability of micro-entrepreneurs to brand, patent and acquire organic certification, some commercial firms have patented many of their unique products. An aggressive awareness, advocacy and media campaign can be a panacea.
Connecting micro-entrepreneurs with organizations like the Federation of Nepalese Chamber of Commerce and Industry, Confederation of Nepalese Industry, Nepal Chamber of Commerce, and bilateral chambers of commerce is necessary for their sustainability.
Enhancing micro-entrepreneurs' capacity to benefit from ICT, supporting them to wield different software, new mobile applications and website to reduce cost and secure better price and promote their products and services online are crucial.
The program needs to include sexual minorities like lesbian, gay, bisexual, transgender and intersexual people if it really wants to reach out to the most marginalized groups. Two-pronged approach of creating entrepreneurs and making them resilient should be adopted.
ramsharan.sedhai@gmail.com
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