The MED Model is based on a pro-poor and inclusive entrepreneur selection and entry process and a stepwise enterprise development process. The six components represent a generalization of the support requirements of micro-entrepreneurs, and the ultimate aim is make the entrepreneurs self-sustaining.
These model is illustrated in a diagram below:
The activities cycle to create and develop a micro-entrepreneur is illustrated in the following steps:
Step 1: Social mobilization for enterprise development
Step 2: Entrepreneurship development through capacity development
Step 3: Technical Skills development
Step 4: Assess to micro-finance services
Step 5: Appropriate Technology Testing and Transfer
Step 6: Market Linkage and Business Counseling
Social mobilization for enterprise development: It involves community sensitization, village community meeting, orientation on the process, principle and strategy, sensitization workshop, and networking with the partner organization. Likewise, the programme has developed special screening criteria which test the entrepreneurial characteristics of the target participants. The selection procedures aim to assess the potential entrepreneurial competencies of target groups, particularly poor, women, dalits, indigenous nationalities and unemployed youth who are eager to become entrepreneurs, and to select those who, by virtue of their behavioural and entrepreneurial profiles, have a higher probability of success.
Entrepreneurship development through capacity development: Imparting entrepreneurial skills is essential to build self-confidence and enhance risk-bearing capacity of the potential entrepreneurs. MEDEP/MEDPA uses 'Start and Improve Your Business' (SIYB), a step-by-step entrepreneurship development package developed by the International Labour Organization (ILO) with technical support from UNDP for rural settings. The SIYB helps entrepreneurs to gradually acquire knowledge and business skills for business creation and development. This has proved to be a catalyst for the expansion of micro-enterprises in rural Nepal.
Technical skills development: Several kinds of training are conducted for technical skills development based on the participants’ interest and choice. Technical skill training is designed and conducted immediately after the entrepreneurship skill development package (i.e. SIYB). The nature and content of technical skill training vary according to the type of enterprises. Skill development is based on a demand-driven concept where MEDEP/MEDPA has developed and applied very rigorous selection criteria that encourage participants to make demand for technical skill development training. As per the demand of the participants, the programme designs and delivers the technical skill development training, ensuring that trained participants are immediately turned into sustainable entrepreneurs.
Assess to Finance: Micro-finance activity refers to a process of facilitating micro-entrepreneurs to have easy access to small-scale loans in different cycles and micro-enterprises to fulfill the credit capital need of entrepreneurs. Micro-credit component is mainly implemented in close collaboration with micro-finance institutions such as Rural Development Bank, Nirdhan Utthan Bank and cooperatives. Apart from this, they are also linked with district level institutions such as Local Development Fund, as per the specific micro-credit need and situation of the districts. MEDEP/MEDPA also encourages micro-entrepreneurs to establish micro-entrepreneurs groups, cooperatives and producer associations. Regular-saving generation is encouraged in such groups with an expectation that the capital thus generated helps group members in other small financial matters and also helps develop the group as an institution. Therefore, the micro-credit component of MED broadly includes generating and mobilizing savings as well.
Appropriate Technology Testing and Transfer: Appropriate technology is a small-scale, decentralized and grassroots solution to technological problems. It is, therefore, low-cost, flexible, easily accessible, convenient to control, and less complicated. As a demand-driven modality of the programme, the demand of micro-entrepreneurs for a wide range of appropriate technology is supported, while addressing issues of food safety, quality and technology. Participatory action research and product development are also effective ways of bringing about improvement and efficiency in products and services. Small-scale appropriate technologies are tested and transferred for the extreme poor.
Marketing Linkage and Business Counseling: Marketing is the most crucial sub-system of any enterprise. It is a social and managerial process by which individual or groups obtain what they need and want by creating, offering and exchanging products and services with others. Customer satisfaction is key to marketing micro-enterprises of the poor. Under the demand-driven marketing strategy, MEDEP/MEDPA follows marketing analysis and development, and step-wise marketing expansion strategies for the selection, growth and sustainability of micro-enterprises. MEDEP/MEDPA also encourages the micro entrepreneurs to establish the site, district, regional and national level market outlets apart from organizing district, regional and national level industrial exhibition and trade fair. Similarly, the programme supports the branding of products and provides training on intellectual property rights.
Follow-up and business counseling are the most important parts for the sustainability of micro-enterprises. The programme gives high priority to business counseling and follow-up services. One EDF is mobilized in each market centre. The EDF visits every market centre at least once a month and attends the Local Micro Enterprise Group Association (LMEGA) meeting. In the meeting, the progress of the enterprises and the problems facing them are discussed. The EDF provides counseling support to help resolve the problems.
MEDEP/MEDPA has developed an entrepreneur registry system for each Micro Entrepreneur. Information about personal information, credit information enterprise information, production and sales information, saving and saving mobilization information etc. is kept in the registry system. From this system, everyone can see the change in income of an entrepreneur or a family. To collect such information, MEG, LMEGA, DMEGA and EDFs are mobilised.