Entrepreneurship Development in Nepal:

A Case of ELAM
Shilu Mananndhar Bajrachary

Abstract: The importance of micro enterprise and entrepreneurship

development in a poor country like Nepal cannot be overemphasized. Micro
enterprises could seem easy tools to intervene for intervening to promote
employment friendly strategies directed towards poverty reduction. However,
developing entrepreneurship and micro enterprises is a daunting task in
the state of vicious circle of poverty. In such a situation, ELAM programme
can be effective in breaking the formidable circle, because the aim of ELAM
interventions is to improve livelihoods condition by assisting the process of
establishment of micro enterprises by poor communities. It has been so far
successful in generating the sizeable number of potential clients, screening
and enrolling the genuine clients into the programme by identifying potential
clients with entrepreneurial traits, option and family support, potentials of
mobilizing finance and credit, product market potentially, and creativeness.

I. THE CONTEXT

Poverty in Nepal is pervasive, largely chronic, and reflected in dimensions of social

and human progress. Nepal is one of the poorest countries in terms of not only per capita
income but also in all socio-economic aspects such as life expectancy, infant and maternal
mortality rate, adult literacy, per capita calorie and malnutrition. Nepal’s population of 28
million continues to experience high levels of poverty, especially rural poverty, and high levels
of unemployment and underemployment. It is estimated that approximately half of the
available work time of Nepali adults is underutilized. Eighty percent of the population depend
for its livelihood on agriculture, with its seasonable off-season and slow periods. The National
Planning Commission estimates that 25.4 percent of Nepal’s people live below the poverty
line, currently set as Rs. 13,328 per year per person. Understandably, the Government of
Nepal has placed the highest priority on poverty reduction and employment generation. The
biggest challenge faced in the country's development efforts is about how to reach the poor
and vulnerable communities of rural Nepal and urban poor with development inputs and how
to make it appropriate for vulnerable households, with no access to information, resources
and networking with the better parts of the country.

Dr. Bajracharya is Associate Professer at Shanker Dev Campus, Tribhuvan University.

22 PYC Nepal Journal of Management, August 2011, Vol. IV, No. 1

There is an imperative need to bring the poor and excluded group (P & E) friendly
development approach for two reasons: i) different social groups of people have different
livelihood needs, opportunities, priorities that need to be included in development planning
and ii) inclusion of P & E groups' ideas, needs and priorities in development will lead to
changes in the overall approach to development so that the focus will be on sustainability
considering inter alias economic growth coupled with "growth with equity". Therefore,
pro-poor growth, good governance and social inclusion for humane development are at
the centre of millennium development agendas.
At the backdrop, the need for pursuing strategies to generate employment
opportunities that will lead to alleviation of poverty is of the highest priority in a country
like Nepal. It is true government, non-government and donor efforts are directed to
provide capacity development programmes mainly in the form of skill development and
business development support services. But then, access and availability of such services
at different levels by different agencies does not adequately address needs of small
entrepreneurs, especially micro entrepreneur group of people like petty producers and
vendors whose risk bearing capacity is very low. Many of the services are being extended
in rural areas due to their obvious disadvantage but it is equally important to note that
there is occurring a large scale migration of rural people to urban and peri-urban areas
in search of jobs and economic opportunities. This is where Elam has positioned to serve
the poor people of urban and peri-urban areas through micro enterprise development.
Micro enterprises and entrepreneurship development play an important role in a
country like Nepal with difficult terrain, limited infrastructure and small and scattered
market. Low purchasing power and limited access to finance also enhance the role of
micro enterprises. These are very appropriate tools for intervening to promote employment
friendly strategies directed towards poverty reduction. Entrepreneurship is, however, not
easy to develop and is conceptualised differently by different authors viz. Schumpeter
(1934) recognised the importance of creative innovation and change, Danhof (1949)
change in formula of production, desire to make profit, Hoselitz (1952), organisation
building capacity, Casson, (1982), thrown by situations, Shapero, (1985) and achievement
oriented individuals, Vesper (1990). ILO defined entrepreneurs as persons with an ability
to see and evaluate business, marshal resources to take advantage of them, and to
initiate appropriate action to ensure success (Meredith et.al., 1982).

II. ELAM PROGRAMME

A Case of Entrepreneurship Development in Nepal

The aim of ELAM interventions is to improve livelihoods condition by assisting the
process of establishment of micro enterprises by poor communities. The project plays
a facilitating role through creation and development of localised Enterprise Service
Providers (ESPs) from local potential young women and men who strive to sustain Elam
approach in a sustainable way.
 Entrepreneurship Development in Nepal: A Case of ELAM 23

Elam aims to diversify the livelihoods and increase the incomes of low-income families.
Elam takes an integrated and market driven approach to micro-enterprise development,
providing and coordinating entrepreneurship training, technical skills training, and micro-
finance access for potential micro-entrepreneurs. Local market and resource studies
inform product and enterprise selection and market linkages. Elam stresses the areas
surrounding the major road network and the market centres as the critical locales for
identifying, training, and assisting selected poor men and women to initiate and develop
their micro-enterprises.
Elam presents the hypothesis that one factor retarding the success of the many
efforts to stimulate employment and self employment is that most programmes are uni-
dimensional, providing only one of the services that are needed to create sustainable
micro-enterprises. Each of these approaches has its strengths and limitations and is
generally is not complete.
This programme component, in general, aims to assisting existing enterprises
to enhance the skills required to develop their business growth plan, to improve their
management practices, and to access the required managerial, financial and marketing
skills, and financial services from within and outside sources. The major client groups of
the component are petty producers and enterprises in the informal sector (especially not
registered) run by a maximum number of five employees including the owner and family
members.
This process entails two aspects: first, generating the sizeable number of potential
clients; and second: screening and enrolling the genuine clients into the programme.
Some of the criteria in use for screening and enrolment of the potential clients are
entrepreneurial traits, option and family support, potentials of mobilizing finance and
credit, product market potentially, creativeness etc.
Client Enrolment Workshop: Elam organizes a workshop to screen clients and
build and enhance business and enterprise background to clients. Elam also visits client’s
premises for analyzing their business situations and assessing their business growth/
expansion opportunities. The potential clients are finally enrolled into GED for Elam
services subject to their successful completion of the workshop, by fulfilling the stated
commitment during the process and a positive assessment of their business growth idea
by Elam.
GED Counselling, Coaching and Consulting (CCC) Services: Elam is providing
the CCC services in the areas of business planning, working capital management, balance
sheet preparation, costing pricing and marketing, account and record keeping, linkage to
credit, cost reduction, product display and decoration, product development and market
testing, market development and market linkages, clean and tidy workplace, internal
saving generation, etc. Every enrolled client has to go through a step wise process by
fulfilling their commitments for being eligible to the CCC services at the next step.
Start your own Business (SYOB): The SYOB programme component is for
assisting employed or unemployed people with apparently sensible ideas for starting
24 PYC Nepal Journal of Management, August 2011, Vol. IV, No. 1

their own business. The basic idea is to support them learn how to start and run a
business, including mobilization of finance.
Clients Identification and Selection: The potential sources of client generation
depicted for GED are also applied for SYOB. A preliminary form is filled-out for potential
entrepreneurs contacting Elam office. A stepwise process for screening and enrolling the
potential SYOB clients has been developed.
Motivational and Business Planning Workshop: This workshop is conducted
in two parts: the first part is designed to inform the potential clients to orient them about
it and its services, and collection and matching of their expectations and assessment to
enrol them into subsequent motivational and business planning workshop. The client
registration form is filled-out by the committed clients for enrolment in the second
workshop. The second part workshop is designed to cover various aspects of business
management and entrepreneurship development.
Sub contracting: Generally manufactures nowadays are not manufacturing
all their components and ancillary requirements but rather sub contracting parts and
components to other business/companies that can develop, manufacture and assemble
components as per design, drawing and work norms provided to them. Quality and
competitive prices are the bench marks for these items. As a result, the market for
sub contracting/sub assembling is growing in size and demand for widening production
based in diversified product per their given standards. Elam/HELVETAS initiated the sub
contracting business practices in Agarbatti (incense sticks), Sinka (bamboo sticks), wire
brush, Papad (poppadom), and wire net with promising results.
ESP development: ESP development is conducted with the objective of providing
reliable and quality local services to micro entrepreneurs to increase the operational
capacity, increase access to market, develop management skills, financial efficiency and
access to networks and information, including sub-contracting for income and employment
generation in the informal sector for the clients. ESPs are expected to provide services
for increasing numbers of micro enterprises, to localize their services as private business
service practices, to ensure cost effectiveness and timely CCC services delivery. ESPs
are developed and capacitated by the project but are independent entities and they
are provided remuneration on task wise basis thus not making them the burden for the
project. In order to remunerate them, Elam has developed a very extensive and elaborate
costing basis. This has not only strengthened the remuneration process but also made it
objective and transparent. This is one of the great strengths of Elam
Micro Enterprise Development Fund (MEDF): Elam has also started developing
and operationalising a fund to extend CCC services as a part of the sustainability exercise.
It has already established a fund of Rs. 1.4 million with the contribution of Rs. 1 million
by HELVETAS, Rs. 300,000 by Birgunj Municipality and Rs. 100,000 by the chamber.
It is located at the chamber and they plan to extend CCC services, micro enterprise
development and related activities and also plans to expand resources. An MOU has
already been signed with Bara DDC to establish and operate a similar fund at Bara.
 Entrepreneurship Development in Nepal: A Case of ELAM 25

Programme Management: The programme management unit (PMU) is located

at Birgunj and comprises of a small but dedicated team with a sub-office at Jitpur.
The Programme Office (PO) at Kathmandu supervises and monitors the activities.
The approach to make it cost effective is obvious from the small team, making ESPs
independent and locating ESPs at the field itself on some kind of area wide basis. There is
a proper understanding and commitment to making the entire effort commercially viable
and sustainable. PMU may be better equipped with enterprise development specialist,
marketing expert, finance expert, and technology facilitator or the functions may be
allocated accordingly.
Implementation Partners: Elam is working closely with partners and has been
able to promote cordial relationship with them. It is working with DDCs, municipalities,
chambers, and other development agencies. It has implanted joint programme with
DLGSP of UNDP and this is an appreciable effort. Elam should make efforts to enhance
such linkages with other likeminded institutions and development partners at least in the
area of enterprise development activities.

III. ASSESSMENT OF ACHIEVEMENTS

Relevance: Elam interventions responded to the emerging needs of the un-

reached segment of rural women and men in the current context of political conflict,
when lack of home based employment, absence of public services and feminization of
poverty exhilarated the rural poverty. By exploiting the existing constraints as challenges
for constructive transformation, Elam developed capacity of socially excluded and other
groups at local level, specially targeting marginalised urban and peripheral clients. At the
macro level, Elam is a fitting tool to respond to the national poverty reduction strategy,
gender mainstreaming strategy of the 10th National Development Plan and the proposed
interim plan. Elam has demonstrated an alternate model of cost effective, inclusive and
gender responsive intervention through maximum use of local resources and indigenous
skills in enterprise development for sustainable livelihood. Most of the activities promoted
by Elam are based on local resources like incense sticks, wire brush, etc. It has selected
clients from women, disadvantaged communities and other excluded groups besides
from Indigenous Nationalities and Madhesis etc.
Efficiency: The Elam integrated approach, combining entrepreneurship training,
technical skills training, appropriate technologies, micro-finance access, market linkages,
and considerable on-going advice and encouragement to new entrepreneurs has
significant up front costs which, however is quite justifiable as it will not only lead to
promoting a viable business entity that will Elam’s reliance on Enterprise Service Providers
(ESPs) who are local residents and commensurate cost efficient strategies help minimize
the expenses The total budget of Elam in the period has been GB 1,026,000 or about
Rs 135,000,000 for the period 2003-2007 meaning that support to one client has cost
Rs. 35,000. This sum on an average generates about two employees. In other words,
generation of one employment has been achieved by investing less than Rs. 20,000. As a
26 PYC Nepal Journal of Management, August 2011, Vol. IV, No. 1

result, it must be reckoned cost effective and therefore efficient. Further ESPs have been
developed but not made employees but themselves were made entrepreneurs to post a
real example for others.
Output: Elam started as a pilot project during 2001-2002 and 166 clients were
developed during the phase. Elam modality was developed practiced as improved thus
creating a basis for further development.

Table 1: Number of Clients

Year SYOB GED TOTA LANNUAL CHANGE (%)
2003 37 137 174
2004 291 257 548 49.4
2005 301 459 760 38.7
2006 547 275 822 8.2
2007 279 539 818 - 0.5

Total 1455 1667 3122

During the five year operation (2003-2007) 3122 clients were developed. GED clients
constituted 53.3 percent while 46.6 percent belonged to SYOB clients. Additionally, 738
sub contracting clients were also developed on the group basis in 41 groups. At the initial
period, the number of clients increased significantly as is to be expected due to initial
period and from 2005 onwards seven to eight hundred client were supported each year.
Females accounted for 43.5 percent of total clients meaning that the project has
given due consideration to promote female entrepreneurs. Pursuant to the HELVETAS
strategy of SLOW, the programme gives emphasis to poor, landless, occupational caste,
deprived, socially excluded and women. The client selection process, which includes
identifying through sources like secondary information, visits and surveys, referrals and
those motivated by demonstration and screening them by examining entrepreneurial
traits, options and family support; potentials of mobilising finance and credit; product
market potentiality and creativeness etc.; gives adequate emphasis for the inclusion of
these categories of clients. It shows that Elam has extended due attention to the issues
of gender and social inclusion.
Preparing these poorest and most disadvantaged persons for entrepreneurship is
a challenge, due to their vulnerability and limited perspectives. The process is arduous
and takes longer; the starting enterprises generally tend to be simpler, and more limited
than those for non-hardcore poor or non-disadvantaged communities. Elam recognizes
that these “clients” have special limitations that must be addressed if they are to be able
to participate in the series of trainings and activities required by the Elam integrated and
sequenced approach. Elam is learning how to provide the support they need without
undermining the sense of self-responsibility that is at the heart of entrepreneurship. It is
not an easy task but Elam has developed and succeeded in modalities to overcome such
challenges.
Small technological innovations are often the key to providing the efficiency and
 Entrepreneurship Development in Nepal: A Case of ELAM 27

quality control that make small-scale production possible and profitable. Elam has helped
to develop and adapt technologies for example developing simple tools and technologies
in the area of wire cutting, bamboo stick cutting etc. and supporting the conversion of
traditional sewing machines by attaching a small motor etc., which in most cases have
made the enterprises possible and/or more viable.
The entrepreneurs are involved in diverse activities. These included trading,
manufacturing and services sectors. Sub-contracting activities include mainly incense
stick production (61.2%), and bamboo stick (23.7%) or the incense stick manufacturing
overwhelmingly dominate the sub-contracting activities. Other sub-contracting activities
include garment, wire brush and wire net manufacturing. It is heartening to note that
Elam has not only been able to promote entrepreneurship and enterprise development
but it has also been able to promote demonstration effect which in reality may have much
greater value as direct project activities may not be able to be taken to the doorstep
of each deserving person. Some 510 persons in 12 groups have followed suit and are
engaged in incense stick production. This is another great achievement of Elam. Thus on
the one hand helps to bring much larger people under gainful employment but will also
aid the project to have greater multiplier effect.
Enterprise Sustainability and Growth. One important indicator of enterprise
sustainability is the drop-out rate. There is no indicator maintained about operating
and those which have dropped out but the graduation rate provides useful indicator of
enterprise sustainability. The graduation rate of 2398 enterprises indicates that virtually
all those that have been enrolled have graduated. The number comes to about 60 %
only but as the criteria of graduation defines two year maturity requirement among
others, virtually all those that have completed two years appeared to have been included
in the graduated records. The drop out rate seems to be very low looking at the rate of
the graduated enterprises. But there is some doubt about the actual drop out rate. The
annual report 2005 gives following information.

Table 2:Information on the Number of Continuing Enterprises

Year Enrolment After 1 year After 2 year

2004 481 481 82

2005 1103 1052 252
Source: Annual Report, 2005

The information shows that in 2004 there is no drop out after the first year but
in 2005, 4.6% clients’ record are not available indicating the possibility of drop out.
However, after the second year, the data is shown for very few enterprises for both the
years seriously raising the doubt about the size of drop out. The explanation may be
graduation before two years and thus excluded from the monitoring. Whatever the case,
It raises some doubt about the actual drop out rate.
However, the general observation indicates that most of them are operating showing
28 PYC Nepal Journal of Management, August 2011, Vol. IV, No. 1

high degree of resilience of Elam promoted enterprises. This survival rate is satisfactory
even in global perspective. Despite apparent slowdowns in the country due to conflict-
related disruptions, the enterprises are almost universally still in business after some
years of operation. A number of GED enterprises have achieved impressive growth, now
employing a number of employees, and are in the process of expansion.
Impact: Impact has been tried to be assessed using sales, profit and employment
indicators apart from empowerment aspects.

Table 3: Increase in Sales

Year No. of enterprises % change after Ist year % change after 2nd year

2004 481 52.1 97.1

2005 764 83.4 65.2

2006 818 43.7 -

Increase in Sales: Increase in sales is an important indicator, which shows the

success of the effort. Clients enrolled in 2004 recorded growth of 52.1% after the first
year and the growth rate increased to 97.1% in the second year. The growth for the
clients of 2005 also recorded similar growth. The achievement by the clients of 2006
was most satisfactory with growth surpassing 143%. Discussions with the clients also
adequately prove that change in sales and incomes were highly encouraging. GED clients
reported 50% to more than 100% growth in sales while SYOB and sub-contracting clients
also responded that the change has been quite significant. Higher incomes are generally
indicative of overall improvement in the quality of life.
Change in Profits: An important purpose of micro-enterprise is to significantly
increase the per capita income of the poor. As an important indicator of success regarding
incomes, Elam compares the entrepreneur’s income before Elam’s intervention with the
net income (revenues minus all non-labour costs) of the resultant micro-enterprise during
the three to four cycles of observation conducted every six month.
This is one area where the available data does not exhibit encouraging results.
The data in many cases shows declining profits. In 2005, profits increased in aggregate
by 10.5% but the records of 2006 shows decline in profits by 10.0%. This does not
augur well for the project. However, in all observations in the field positive changes were
observed indicating that Elam has been successful in bringing a satisfactory change in
the lives of the marginalised, poor and the excluded population. More and more people
are sending their children to schools. Some reported that they have been able to share
the burden of household expenditure. Some reported that they have been able to add
assets including construction of new buildings and purchase of land. Others reported of
increased spending on health, foods, cloths and other necessities. Some even reported
of being able to save some portion for future. Thus, the overall impression is that of
enhanced benefit as a result of participation in the Elam process.
 Entrepreneurship Development in Nepal: A Case of ELAM 29

Table 4: Change in Profit

Year Change percentage

2005 83.7
2006 90.7

Employment Generation: Elam has not only helped the clients but also has
contributed in generating gainful employment opportunities. The clients have been able
to expand their activities, increase sales and walk on the path of growth. In 2004, Elam
helped to create 275 additional jobs. In 2005, the number of additional jobs went up to
315. It increased drastically by 957 or 58.2% of the original employment in 2006. It means
Elam has positively contributed in generating additional employment opportunities.

Table 5: Employment Generation

Additional Percentage
Year Original After one year
employment change

2004 1133 1408 275 24.3

2005 1100 1415 315 28.6
2006 605 1562 957 58.2

Impact on Women’s Positions: Women entrepreneurs reported that they

have been able to raise their status and identity inside and outside their household,
and strengthen their role in household decision making. The majority of the women
entrepreneurs interviewed stated that their income generally goes for better food,
clothing, education of their children, health, and other household expenses.
Women who have had low self-esteem become economically empowered, at decision
making, have a higher standing in the community, and sense of solidarity. A large number
of the women are operating house based enterprises in a slow but continuous mode due
to their family responsibilities. Most of them are working almost on a part time basis and
this to a larger extent explains the difference in the additional income the males have
been able to generate. Albeit women who traditionally relied upon males for financial
resources have been empowered to possess and use money. Many claimed that they
have money on hand and felt empowered. The roles have changed and in many cases
women have become the principal bread winner. For others, they have been able to
contribute to the family coffers. These changes have contributed to social, behavioural,
attitudinal, and status change in the lives of many women.

IV. LESSONS LEARNT

 Locally capacitated ESPs and their service provisions ensure sustainability of the
programme and is cost effective model for outsourcing and up scaling the business
development.
 Capacity building of ESP through coaching while providing CCC services to clients
30 PYC Nepal Journal of Management, August 2011, Vol. IV, No. 1

enhances their confidence and contribution in providing quality services to the

clients.
 Institutionalization and legalization of ESP is essential before scaling up credit
services through ESPs.
 CCC tools (structured package programme according to clientele type/ sector (basic/
specific), tool kits, games, exercises need to be updated regularly incorporating
experimental learning for further improvement The present materials mainly consist
of customer types and sales processes. It may be gradually added with the concept
and processes of quality, standardisation, market positioning, promotion, pricing,
branding, packaging, publicity, and relationship marketing etc.
 A common forum of graduated clients facilitates in dissemination information on
business policy (frequently changing government rules e.g. tax etc) and to maintain
good relation with other service providing organizations.
 Credit is an essential component for promoting micro enterprises which is seen
viable when linked with ESP services. In areas where ESPs are operating as credit
agents and where ESPs provide guarantee, credit access is easier.
 Sub contracting business approach is an effective way for providing income/employment
to a large number of people, particularly women working from their home.

V. CHALLENGES AND ISSUES FOR CONSIDERATION

Despite having made substantial progress in promoting rural micro

enterprises, Elam faces the following challenges.
 Most of the skill training was extended by ESPs themselves. It may not augur well
as ESPs themselves may not have been exposed to required skill levels in diverse
fields. Actually they reported demand of skills in which they were not proficient.
 Group entrepreneurs are not extended entrepreneurship training. Entrepreneurship
culture may not therefore have been developed among all clients.
 GED clients have reported improvement but visibility is limited. There is a need for
more forceful strategies including keeping of baseline data adequately and then
comparing with increased employment, profit and assets.
 The information materials developed are useful, innovative and simple. However,
there is room for improving these materials by adding concept and processes
of quality, standardisation, market positioning, promotion, pricing, branding,
packaging, publicity, and relationship marketing etc.
 In certain cases, sustainability despite adequate evidence of efforts remains to be
seen. However, there is no denying that the model developed appeared to be highly
sustainable. The signs of sustainability are the sustainability of ESPs who are not
only confident but also are working in the lines. Their plans and programmes also
indicate the possibility of their sustainability. It will mean continued access to CCC
 Entrepreneurship Development in Nepal: A Case of ELAM 31

even without the project. Besides the strong linkage to the market especially for the
sub-contracting clients provide a strong cushion for sustainability. All these make
the model relatively more sustainable.
 There is a need to give greater attention to quality and standardization issues.
Without these ability to compete in the market will be limited.
 Greater attention is also needed in marketing aspect, particularly for those who
are not linked to sub-contracting. Activity selection should be preceded by market
opportunity studies.
 In the finance area two limitations are observed. In the long run, it may not be
desirable for Elam project to guarantee on behalf of the clients particularly in view
of volatile situation in the country. There is a credit gap for those clients for whom
ESPs may not be ready to provide guarantee.
 A big challenge has been to maintain consistency of products and quality of products,
e.g., amount and regular supply of products, quality packaging, labelling, branding,
storage so as to meet the market standard In products with increasing market,
standardisation efforts should start with products like incense sticks for example
uniformity in length, look, content etc.
 Normally, the participants of the programme were found to be highly motivated to
implement what they learnt through training and exposure. However, due to limited
practice and absence of innovative marketing concept like pushing local products,
project level branding, linking to international markets through viable intermediaries
like Organic Village, some of the entrepreneurs have yet to internalize the concept and
tactics of preparing their products for market attraction and competition. Likewise,
the programme would need to give more emphasis and explore opportunities for
Business to Business (B2B) linkages to promote micro-entrepreneurs products to a
wider customer base though this happens to be a strong forte of Elam. The business
and promotional strategies for GED, SYOB, and ShG clients should be different.
 The products are generally organic, hand made and produced mostly by the
poor women; these are the core values for market promotion of their products.
A combination of value chain analysis particularly in areas with larger numbers to
sustain their activities strongly and provide better backward and forward linkages
have to be made incorporated through highlighting with promotion of every product.
 Another big challenge faced by Elam is how to strengthen and retain a favourable
socially enhanced business environment for the women by managing appropriate
technologies, sufficient follow up support to women in production process and
marketing. The women targeted by Elam come from generally socially deprived
households besides being victims of economic poverty. The women need extra
support for motivation, so do the Dalits and other excluded castes and conflict
affected communities. Elam needs to plan strategically for meeting this extra effort
in motivating them, not only through linkage building but also by providing special
technical support to retain motivation of socially marginalized section.
32 PYC Nepal Journal of Management, August 2011, Vol. IV, No. 1

VI. RECOMMENDATIONS

 Skill training component should be provided by skilled personnel if necessary linking

with other skill training institutions or activities. It is generally practised now but in
some cases these are provided by ESPs only.
 All clients should be extended entrepreneurship training to promote entrepreneurship
culture.
 Training materials should be upgraded incorporating some advanced but useful
concepts particularly in marketing as has been explained earlier.
 Elam should not provide guarantee but mechanisms should be explored e.g. group
guarantees and ESP guarantee to gradually replace Elam guarantee.
 Varied strategies should be adopted to improve access to finance. An additional
avenue has emerged with the establishment of Rural Self Reliance Fund by NRB.
It is available to cooperatives at very low interest rates. So cooperatives of micro-
entrepreneurs wherever feasible should be established with at least 25 members
to enable them to access RSRF. Besides coordination with various development
initiatives and funds at community/village/district levels and link with various
institutions and mechanisms like RMDC, and FINGO etc may be promoted besides
the formal financial institutions.
 There is a need to promote inter project cooperation and coordination at least
among projects of similar nature to learn the best practices and adopt more viable
and effective approaches.
 Monitoring should be further strengthened internally as well as externally involving
local chambers and other partner organisations.
 Micro enterprise and micro-finance policies must be brought out at the earliest if
need be with the cooperation and the joint working with projects involved in micro
enterprise development.
 The project should engage in growth strategies by working on value chain basis if
feasible in collaboration with appropriate agencies particularly for products where
the prospect is good for large scale involvement. The project need not do it itself but
can collaborate with institutions for enhanced benefits.
 Elam operates around the urban and peri-urban areas. So there is a great prospect
of promoting service related activities that may have adequate market. It is true
Elam has been engaged in attending to promoting trading and skill oriented services
like hair cutting. There is a plethora of other services that may be promoted for
example construction related activities, supply related activities and other services
requiring low and middle level skills in mechanics, electronics, auto repairing,
electrical, plumbing etc.
 For improved marketing relations may be established with appropriate agencies to
promote feasible products through sales outlets in Birgunj or linking with agencies
in Kathmandu like Organic Village, Mahaguthi, Dhukuti, WEAN etc.
 Entrepreneurship Development in Nepal: A Case of ELAM 33

 The capacity of ESPs should be built in enabling them to provide requisite services
if necessary by instilling some specialisation as Elam already appears to be doing.
There is a need to orient in the areas of enterprise growth, advanced marketing,
inputs and procurement, finance, and technology. Further sensitization in the areas
of gender, working in risky situation etc. may be helpful.
 Micro enterprise development is an innovative concept and should be further
promoted. There is a need to motivate more and more agencies to participate in
the process and make the fund really worthwhile. As far as possible it should be
made independent of political players. Hence the most suited agencies to manage
it may be the chambers or alike institutions. Careful preparation of the operational
manual is necessary for utilising the fund.
 Business incubation is an important concept and will suit more for small and medium
scale enterprises. Hence the scope is quite good in the urban and peri-urban
areas. The way group enterprises are being developed; there is a need to give it
permanency. One approach may be cooperation of such groups that will enable
them among others to access easy finance from Rural Self Reliance Fund (RSRF)
promoted by Nepal Rastra Bank. Of course all the groups may not be converted into
cooperatives. The risk sharing model should incorporate additional development
agencies to share the burden and gradually may also adopt micro insurance type
activities.

REFERENCES
Bajracharya, Pushkar (2007), Scoping Study for MEDEP Phase Three, Kathmandu: UNDP.
Bajracharya, Pushkar (2008), Programme Document for MEDEP Phase Three, Kathmandu: UNDP.
Bajracharya, Pushkar and Neeta Shrestha (2009), Evaluation of CSP Programme, Kathmandu:
DFID.
Casson, Mark (1982), Entrepreneur: An Economic Theory, Oxford: Martin Robertson.
Danhof, C.H. (1949), Observation of entrepreneurship in agriculture, change and the entrepreneur,
Cambridge: Harvard University Press.
HELVETAS, Annual Reports of ELAM, Various Issues, Kathmandu.
Hoselitz, B.F. (1951), The Early History of Entrepreneurial Theory, Exploration in Entrepreneurial
History, Vol. 3.
Meredith G.G., R.E. Nelson, and P.A. Neck (1982), The Practice of Entrepreneurship, Geneva: ILO.
National Planning Commission, (2010), Approach Paper to Three Year Plan, 2010-2013,
Kathmandu.
Shrestha, Ramesh, (2007), Entrepreneurship Development in Nepal, Unpublished Ph.D. Thesis,
Faculty of Management, Tribhuvan University, Kathmandu.
Vesper, K.H. (1990), New Venture Strategies, Englewood Cliffs NJ: Prentice Hall.