Microenterprise Development as a Poverty-Reduction Strategy in Nepal: A Multidimensional Analysis of the Factors Determining Microenterprise Performance

Working Paper
Published on 1 May 2014
Authors
Ajay Thapa

Abstract

Microenterprise development is one of the most discussed antipoverty strategies in contemporary development discourses. Many developing countries have adopted this strategy to fight against poverty. In Nepal also, a microenterprise development program with the objectives of increasing income and employment, and thereby reducing poverty, has been implemented since 1998. Microenterprise development is particularly targeted to the households living below the poverty line. Among the people living below that line, the program is more focused on rural women, unemployed youth, and people from socially-excluded communities such as dalits, indigenous nationalities, religious minorities, other madhesi castes, differently-abled people, brahmin, chhetri, sanyasi, thakuri, disaster-affected families, conflict-affected families, people living with HIV and AIDS, and Maoist youth ex-combatants discharged from cantonments.
Antipoverty strategies often come under criticism for their poor performances. The microenterprise development strategy also, apart from some success stories, is not very far from such criticism. Most of the studies in Nepal have focused on assessing the impacts of microenterprises. Some studies have found positive impacts of these enterprises in improving the livelihood of the people, while other studies have reported that not all microenterprises are as successful as there have been purported to be. Therefore, in response to why some microenterprises are more successful than others, or in other words, why some microenterprises perform better than others, this study focused on the investigation of the socio-demographic and economic characteristics of micro-entrepreneurs and microenterprises, exploring the microenterprise performance, and identifying the factors determining such performance.

Authors

Ajay Thapa

Pokhara University