Micro Enterprise Development Programme (MEDEP)

Project Overview

Over eighty percent of Nepal’s population live in rural areas. Inadequate income generating opportunities in these areas have been a major cause of widespread poverty and outflow of productive workforce abroad.  With aims to cater the needs of socially excluded groups living below the poverty lines by promoting off-farm employment, the Government of Nepal (GoN) and the United Nations Development Programme (UNDP) started implementing Micro Enterprise Development Program (MEDEP) in 1998. Over the last 16 years, it has evolved as one of the most successful poverty reduction initiatives directly working with the poor and yielding unparalleled results on the ground. It has succeeded to establish a model as Micro Enterprise Development (MED) Model which is the base enterprise development programme in Nepal. It has helped the Government of Nepal (GoN) to build structures and environment for the sustainable micro enterprise development in Nepal. Eventually, GoN has internalized the programme into Micro Enterprise Development for Poverty Alleviation (MEDPA) since fiscal year 2009/2010. With the approval of MEDPA Five Year Strategic plan by the Government of Nepal in July 2013, both the Programmes are being implemented in unison. MEDEP has been expanded in the fourth phase (August 2013-July 2018) with an objective of the capacity building of the GoN agencies and private sector organizations for the sustainable micro enterprise development in Nepal and phase out in July 2018 after Internalization of the programme to government led MEDPA.

Project duration:

Phase 1: 1998 to 2003
Phase 2: 2004 to Mar 2008
Phase 3: Mar 2008 to Jul 2013
Phase 4: Aug 2013 to Jul 2018

Geographic coverage:

Phase 1: 10 districts
Phase 2: 25 districts
Phase 3: 36 districts
Phase 4: 38 districts

Focus area:

Poverty Reduction

Phase IV Key Team Members:

Nabina Shrestha

UNDP focal point

Dr. Lakshaman Pun

Chief Techincal Advisor

Dr. Ramji Prasad Neupane

National Programme Manager

MEDEP was jointly implemented by UNDP and Ministry of Industry, Commerce and Supplies, Nepal Government funded by Australian Department of Foreign Affairs and Trade (DFAT). MEDEP created systems, structures and enabling environment for sustainable development of micro enterprise sector by:

  • Supporting the Government of Nepal to implement MEDPA program;
  • Building the capacity of the government and the private sector including NGOs (MED service providers) to sustainably deliver Micro Enterprise Development;
  • Strengthening the capacity of micro-entrepreneurs’ associations to sustainably provide members with a number of business development services such as access to markets; access to finance; improved technologies and advocacy.

MEDEP continually worked to support uplifting rural poor by motivating them to engage in enterprises. To do so, MEDEP:

  • Provided skill and business training and other support, especially for women and poor and disadvantaged people to set up micro-enterprises;
  • Assisted to establish business support services and representative organizations for micro-entrepreneurs; and
  • Worked with the government to improve policy environment.

MEDEP’s technical support led the government to replicate the MEDEP model as Micro Enterprise Development for Poverty Alleviation (MEDPA). The government has been implementing MEDPA since 2010. Currently in 69 districts, the GoN aims to expand it to all 77 districts by new fiscal year 2018/19. The Cabinet endorsed MEDPA operational guidelines and overtaking MEDEP.

For sustainable development of micro enterprises in Nepal, MEDEP facilitated the approval of a number of national level policy and guidelines. In 2013, the government endorsed MEDPA Five Years Strategic Plan (2070/71 – 2074/75), MEDPA Operational Guidelines and MEDEP Phase IV (2013/14 – 2017/18) document. In 2010 the government endorsed Industrial Policy which identifies Micro Enterprise Development as one of the important pillars of country's economic development. The government has also finalized the Industrial Enterprise Bill which proposes various concessions to micro enterprise sector and tabled in the parliament.  

MEDEP's importance to achieving the MDGs

  • Reduces poverty and hunger (MDG 1) by increasing the incomes of poor rural households.
  • Promotes gender equality and empowers women (MDG 3). Sixteen of the 36 district micro-entrepreneurs' group associations and 7 of the 37 business development service providing organizations promoted by the project are headed by women. Most of the project's new women entrepreneurs have a strengthened role in household decision-making.
  • Improves school attendance and the health of women and children as women's incomes go mainly on better food, clothing, and education for their kids and to pay for health care (MDGs 2, 4, and 5).
  • Promotes environmental sustainability (MDG 7) by working with forest users' groups for the sustainable harvesting of forest products and by promoting environment-friendly enterprises.