Suchergebnisse

One of the biggest problems of Nepal has remained overwhelming poverty among the rural populace. At the moment, more than 25 percent of the population is compelled to live their life without basic necessities of life. As the predominant population lives in rural areas and depends on agriculture for their living, poverty in Nepal has been considered as rural phenomenon. In the past, the Nepalese government tried to address the poverty problem basically through supply-led credit interventions. However, they could not bring the desired result because of their limited focus on "credit alone" without emphasis on other support services. By considering past failure, with the support of donors, the Nepalese government started implementing Microenterprise Development Program (MEDEP) in 1998 in 10 districts(at the moment running in 36 districts) by focusing on women, economically and socially deprived communities, and hard core poor integrating components related to social mobilization for enterprise development, entrepreneurship training, technical skills development, access to finance, appropriate technology testing and transfer, and marketing linkages and business counseling . Because of meager economic base of the poor, microcredit is very important for them to start up a microenterprise. In that sense the microfinance component of MEDEP is the most important component while talking about reduction in poverty through microenterprise development in Nepal. Against this backdrop, we have assessed the effectiveness of microcredit provided to MEDEP entrepreneurs in the Sindhupalchowok district in eastern Nepal during 2005-2008 by various financial institutions by using propensity score matching methodology. Secondary data (2005-2008) that was made available to Seoul National University (SNU) by the Microenterprise Development Program (MEDEP) has been used for the purpose of this research. In addition, qualitative (exploratory) research methodology has also been used by interviewing 38 MEDEP microentrepreneurs in order to supplement information need to better explain the results received through PSM estimation. The major objective of the research is to assess the effect of microcredit support in enterprise development for poverty reduction among MEDEP microentrepreneurs. In this regard, efforts have been made to assess the effect of microcredit on sales, cost and profit of entrepreneurs in their entrepreneurial activities. Moreover, the effect of microcredit on the enterprise and the entrepreneur levels has also been assessed as per the research framework proposed. The effect has been measured in two time line scenarios "After one Year" and "After two years". In the first scenario, sales, costs and profit are statistically significant. However, the effect on profit is found to be negative implying that immediately after the establishment of any enterprise making profit is not that easy in the pretext that the entrepreneurs need more time to arrange raw materials, establish linkages with processors and traders, and to arrange necessary sales outlets. Even if the average effect of treatment on the treated (ATT) for profit is negative, the value of profit for the treated group is positive conveying the message that treated groups also had profit but it was less in comparison to untreated groups. In the next scenario, effect "after two years", the microcredit effect on sales and cost are statistically insignificant, whereas such effect on profit are statistically significant. Besides, there is a fluctuation in cost and sales values for treated group in two different scenarios. According to AsDB (1997) fluctuations in the performance of microenterprises in short span of time is possible in developing countries as a micro entrepreneur may have many part time or seasonal activities undertaken to support family income apart from the specific enterprise he is running at the moment. Net earnings in this kind of microenterprises are used for survival purposes meaning that they have short term impact on poverty thorough self-employment with larger number of direct beneficiaries. Livelihood microenterprises show lots of fluctuation in their schedule and volume of production (ibid). ATT derived is the average value of the estimated additional effects of each microcredit borrowing entrepreneur. All the microcredit borrowing entrepreneurs, however, have their own additional effects, which is the effect of microcredit after controlling for selection bias. In this context, we have performed econometrical analysis on the effect of different characteristics/explanatory variables with a data set of microcredit borrowing entrepreneurs using these additional effects as dependent variables. While doing so, rural dummy, savings, Hindu dummy, Dalit Dummy, PCI before MEDEP were found to be significant. However, the contribution of saving is significant and coefficients are positive in both scenarios showing the vital role saving was playing to make credit effective in the effort of poverty alleviation. Statistically significant but positive values of per capita income before MEDEP intervention in case of cost and profit have shown that the real poor were not contributing in microcredit effect on cost and profit. It raises a question whether MEDEP had really succeeded to bring hard core poor people in its ambit as lower level of profit might not encourage them to borrow microcredit and run microenterprise. Even though microentrepreneurs had not been able to generate employment to outsiders they had managed to create work for themselves. It is positive aspect while dealing with poverty because those who were making the agriculture sector overburdened, had been diverted away to the microenterprise sector. Among the major targeted beneficiaries of MEDEP, the women's contribution to generate positive effect of microcredit is not proved except in the case of sales and cost in the "after two years" and "after one year" scenarios. Dalits, however, were doing well in the long run contributing to generate profit. Indigenous microentrepreneurs, though a major focus of the program, are statistically insignificant showing that their role needed to be increased in the whole MEDEP process and basically in borrowing microcredit. On the whole, we have concluded in our research that microcredit had positive effect on the enterprise level in terms of income generation, employment creation and savings and positive but mixed results on the entrepreneur level in terms of enhanced self-esteem, control over resources and community participation. This conclusion has been supported by the findings of the qualitative research (interview) as well. However, the MEDEP has been suffering from number of problems for years, especially from the perspective of institutional development for the sustainability of the program and from the perspective of delivery of microcredit and other support services in rural areas. We believe that microcredit would have done much better, if those problems had been sorted out. Considering the scope of this research, we are not able to ascertain with conformity whether microcredit had contributed to poverty reduction among MEDEP entrepreneurs of Sindhupalchowok district. However, we expect that microcredit might have contributed to some extent in the effort of poverty reduction through MEDEP in the district. The extent, depth and magnitude of such reduction need to be confirmed through in-depth research with comprehensive data on economic and non-economic dimensions of the household, microentrepreneurs and microenterprises. Nevertheless, we recommend the Nepalese government (Ministry of Industry) and United Nations Development Program (UNDP) to expand the coverage of MEDEP nationwide by addressing challenges it has been facing. ; Doctor