This post has been self-published on Youth Ki Awaaz by IMPRI Impact and Policy Research Institute. Just like them, anyone can publish on Youth Ki Awaaz.

How Government Policies Have Enabled MSMEs In Nepal And The Impact COVID Has Had On Them

More from IMPRI Impact and Policy Research Institute

As Micro Enterprises play an important role in the development of countries, especially in smaller South Asian countries, it is important to focus on efforts for their growth and expansion.

Keeping in mind the same, South Asian Studies Center (SASC), IMPRI Impact and Policy Research Institute, Counterview and Centre for Development Communication & Studies (CDECS), Jaipur, organised an online discussion on Enabling Micro Enterprises for Economic Growth: Entrepreneurship Development with Government Policy Interventions in Nepal, on 29 April 2021.

Prof Utpal K De, Professor, North-Eastern Hill University, Shillong, started the discussion by introducing the speaker and then revealing that as employment opportunities were already low in rural areas, the ongoing pandemic seemed to have made the situation only worse, compelling a lot of people to engage in entrepreneurship by building their own micro-enterprises.

It is, thus, crucial for the government to support and regulate these enterprises to function ecologically and sustainably to ensure the growth of the people, their micro-businesses and the growth of the overall economy.

image 173
Dr Ramji Neupane.

Dr Ramji Prasad Neupane, National Project Manager of MEDPA-TA Ministry of Industry, Commerce, and Supplies, Government of Nepal, then started with his presentation on implementing the Micro Enterprises Development for Poverty Alleviation (MEDPA) program in Nepal.

According to the Industrial Enterprise Act, 2076, of Nepal, a Micro-Enterprise can be defined as any business entity with fixed capital not exceeding NPR (Nepalese Rupee) 2 million, excluding house and land; where the entrepreneur is themselves involved in the operation and management of the enterprise; consists of no more than 9 workers; includes an annual transaction of fewer than NPR 10 million; and the capacity of electric energy, fuel, equipment or machine, if any, used is 20 KW or less.

The various efforts by the Nepal Government to support Micro Enterprises include Micro-Enterprise Policy, 2007; Industrial enterprise Act, 2020, providing tax exemption to micro-entrepreneurs; Financial Act, 2020/21; Provincial Industrial Enterprise Act; National periodic plans, currently ongoing 15th periodic plan from 2019/20 to 2023/24; and MEDPA Operational Guidelines.

The different issues that the country has to confront in promoting entrepreneurship among the poor include deciding the implementation mechanism to make the programs reach select target groups, discussing whether the poor people can become successful entrepreneurs, whether women can participate as much as men, whether the informally operating micro-enterprises will contribute to the national economy and how the progress can be sustained once the program is phased out.

The program aims at helping people develop entrepreneurship skills and knowledge in order to encourage more people to indulge in micro-businesses. Dr Neupane revealed that the MEDEP program has been through 4 phases, after which, in 2018, it was internalised as MEDPA.

The program had expanded from 10 districts in 1998 to 77 districts in 2018. The MEDPA program activities have been expanded in 753 local governments — the municipalities.

The Micro-Enterprise Development (MED) model provides:

  1. Intervention for micro-entrepreneurs in enhancing local, national and international market demands.
  2. Selection of target groups and their needs and demands identification.
  3. Training people to increase their enterprise development potential.

Training is provided to micro-entrepreneurs in various components such as technical skills development, marketing and business counselling, providing access to microcredit, social mobilisation for enterprise development and access to appropriate technology.

The Micro-Enterprise Development consists of five stages:

  1. The first stage is “pre-startup”, which is focused on group formation, saving and credit operation and group management for the enterprise.
  2. The second stage of “startup” involves credit accessibility training, CFC marketing linkages and counselling.
  3. The third stage, scaled up and “graduated”, includes branding and packaging, exposure visits, and SIYB, TOEE and TOGE training.
  4. Product development and diversification, quality control, cost-sharing and product association are part of the fourth stage of enterprise becoming “resilient”.
  5. The final stage is the growth and graduation of small enterprises.

The key features of the MED model include its focus on target groups’ interest, market potential and availability of local resources, providing an integrated service package, encouraging job creation rather than job-seeking, development of a Common Facility Centre for the hardcore poor and promotion of socio-economic empowerment.

Over 20 years, MEDEP/MEDPA has enabled the creation of 1,72,514 Micro-Entrepreneurs and 3,44,939 employment creation, with approximately 44% Micro-Entrepreneurs moving out of poverty, along with the creation of 452 common facility centres.

The MED target groups are based on people living below the poverty line, hardcore poor, youth living below the poverty line, women, Dalits and indigenous nationalities.

As MED involves the three levels of government, the different ways through which it aims to empower people are through:

  1. Policy formulation.
  2. Enhancing provision of financial resources.
  3. Human resources management.
  4. Development of MED-related institutions.
  5. Capacity building.

The model requires collaborations with universities, corporates, local and global markets, government institutions, etc.

According to Dr Neupane, the development of micro-enterprises is very important for the local economy of a country like Nepal, where industrial development is not very prevalent. In his experience, politicians and bureaucrats tend to notice growth only in terms of big industries, ignoring the efforts and growth of micro-enterprises.

After the presentation, Dr Arjun Kumar, Director, IMPRI, took over the discussion revealing that there were more than 7 million registered MSMEs in India. However, the coordination for effective implementation of schemes for MSMEs seems to be lacking in India.

He then proceeded to ask Dr Neupane about the different hindrances faced in the implementation of MEDPA in Nepal, the difference in urban and rural scenarios in his perspective, the occupation that micro-enterprises in South Asian countries can focus on.

In Nepal, 50-70% of Micro enterprises are agro-based, and hence, it is one of the major areas that can be targeted for small businesses.

Dr Neupane disclosed that as he has worked mostly with the rural population. He has found a lack of confidence among rural poor people in their entrepreneurial skills. Thus, it is important to train them to bring out their true potential.

In Dr Neupane’s experience, it is important to support emerging micro-entrepreneurs continuously for at least 3 years, or else they might relapse.

One of the biggest problems faced by micro-enterprises is the lack of willingness of banks to provide small credits to small entrepreneurs despite government provisions and instead of finding ways to divert that money to bigger industries.

Dr Neupane also mentioned that even though the micro-enterprises can survive in the villages, it is when it starts expanding and when its financial needs start increasing that it becomes more difficult for them to access credits, and there is, of course, the lack of collateral which poses a serious problem.

Another important issue faced in Nepal is about lack of technology and the lack of information about technology. This increases the burden for the supporters as well the ones in need of support.

image 174
Dr Arjun Kumar.

Dr Arjun Kumar posed another question about how the program measured whether or not an entrepreneur had moved out of the poverty line.

Dr Neupane responded that, like other countries, Nepal also had a nationally defined limit for classifying people in poverty. Before starting the intervention, the incomes of the individuals and their families are measured. If, after the intervention, in a year or two, the individual’s household income seems to have increased beyond the national limit of minimum income, the person is said to have graduated as a micro-entrepreneur.

When asked whether Nepal follows a model similar to China’s semi-urban mission or Indias’ model, Dr Neupane answered that Nepal is closer to using India’s approach as compared to the Chinese approach because it has technology development closer to that of India and because China seems to be much more technologically robust than the other two countries.

Dr Arjun then asked about the impact of COVID first and second waves on Microenterprises.

Dr Neupane revealed that even though the situation wasn’t very bad in the first wave due to timely interventions, the impact of the second wave has been much worse and the micro-entrepreneurs have been struggling a lot with the transportation of raw materials and sales. However, the government has come out with certain schemes to help them out.

image 175
Dr Simi Mehta.

Dr Simi Mehta took over to reveal that there are schools in Delhi trying to instil entrepreneurial skills in students at the school level itself and asked if similar efforts were being made for school students of Nepal as well.

She also asked if the government of Nepal was reaching out for international help from international organisations to bridge the technological gaps for the growth of micro-enterprises in the country and expand the program.

Another question asked by her was about the government’s efforts to commercialise the products to get a good market rate for the entrepreneurs.

Dr Neupane began by answering that there were no entrepreneurial skill development initiatives at the school level in Nepal. However, the conversations are going on to change the mindset of people towards favouring entrepreneurship at the school level itself by introducing such programs for students.

Even though they have introduced a 4 years bachelor’s in entrepreneurship development at the university level, there is still a long way to go in order to generalise the skills to a wider population.

Regarding reaching out to international organisations, Dr Neupane revealed that the World Bank had started investing in the country. However, in collaboration with the Ministry of Agriculture and not with the Ministry of Industry, and the investment might show effect in a few years.

In terms of commercialisation, Dr Neupane pointed out that there are a lot of micro-entrepreneurs that simply don’t want to grow. However, the government is trying to make efforts for the growth of micro-enterprises and turning them into more small enterprises by commercialising the micro-businesses.

According to him, in the COVID situation, as many migrant workers are returning to Nepal, the government needs to come up with measures to help them develop micro-enterprises.

The session was then concluded with Dr Arjun Kumar thanking Dr Neupane Neupane and Prof Utpal K De, and the audience. He also highlighted the need for the development of micro-enterprises in South Asian countries as they face a high number of migrations and increasing urbanism bringing a lot of challenges for the poor.

Acknowledgement: Mahi Dugar is a research intern at IMPRI.


You must be to comment.

More from IMPRI Impact and Policy Research Institute

Similar Posts

By Samia Arya

By Uttam Singh

By Kshitij Bhasin

Wondering what to write about?

Here are some topics to get you started

Share your details to download the report.

We promise not to spam or send irrelevant information.

Share your details to download the report.

We promise not to spam or send irrelevant information.

An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Read more about her campaign. 

A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

Read more about the campaign here.

A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

Read more about the campaign here.

A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

Share your details to download the report.

We promise not to spam or send irrelevant information.

A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

Sign up for the Youth Ki Awaaz Prime Ministerial Brief below