The Government of Nepal, with the financial and technical support of the United Nations Development Program (UNDP), launched the Micro Enterprise Development Program (MEDEP) in 10 districts in 1998 as a pilot phase with the objective of creating employment opportunities at the local level through mobilization of local resources for rural communities. The program succeeded in creating entrepreneurs in a micro-enterprise development model that provides business services through phased and integrated services. Following the success of the program during the first phase, the Micro Enterprise Development Program was implemented in the second phase from 2004 to 2008 in 25 districts. The second phase was supported by the UK Government's Department for International Development (DFID), the New Zealand Government (NZAID) and the Australian Government's Agency for International Development (Aus AID).
Following the success and effectiveness of the first and second phases of MEDEP, the Government of Nepal extended the third phase of the program from 2008 to 2013 under the technical support of the United Nations Development Program (UNDP) along with the financial support of the Australian Government's International Development Agency (AUS AID) and the Government of Canada's International Development Agency (CIDA). During this period, the program expanded to 13 more districts and reached 38 districts. After the success and effectiveness of this program, the Government of Nepal since 2066/67 decided to internalize the Micro Enterprise Development Model developed by this program and implemented it from its own resources as the Micro Enterprise Development Program for Poverty Alleviation (MEDPA) through the then Ministry of Industry. In this context, the then District Development Committee and local bodies also allocated their own resources to internalize and operate this micro enterprise development model.
In the context of the internalization of the micro-enterprise development (MED) model at the local level, the Government of Nepal approved a five-year strategic plan for MEDPA in 2070 BS (2070/71 - 2074/75) for its implementation. "Directives on the operation of Micro Enterprise Development Program for Poverty Alleviation, 2070” was issued. After the Government of Nepal internalized the MED Model as MEDPA, the MEDEP’s fourth phase was implemented from 2013 to July 2018 with the support of UNDP and the Australian Government's Department of Foreign and Trade (DFAT) to institutionalize it and enhance the institutional capacity of its stakeholders. Towards the end of MEDEP IV phase, the MEDPA program has been expanded to all 77 districts the state restructuring under federalism.
After the departure of MEDEP in July 2018, the Government of Nepal has given continuity to the MEDPA program and has implemented in all 753 local levels. The government has allocated a budget of Rs 2.24 billion to Micro Enterprise Development Program for Poverty Alleviation (MEDPA) in last FY 2077/78 whereas in the current fiscal year 2078/79 the total budget of Rs. 2.26 billion has been allocated for MEDPA implementation in all 753 local levels as a conditional grant.