INTRODUCTION
Every year, more than three hundred thousand people seek employment opportunities in Nepal. Many of them are involved in agricultural activities already, 80% of the Nepalese people depend on farming and livestock cultivation, but look to supplement their incomes. They seek jobs in government organizations, non-government development organizations, manufacturing enterprises, schools, travel and trekking agencies, etc.
However, there are not enough jobs in the county to fulfill the needs of every Nepalese and provide him or her with economic and social security. Therefore, the need for an or ganization that can help strengthen the national economy by creating more enterprises and jobs is intense. In order to partly satisfy this need, His Majesty's Government (HMG) introduced Bhaktapur Development Project's Economic Promotion Unit (BDP-EPC) in the 1980s with the objective of developing new approaches to enterprise creation and promotion.
As the unit performed excellently, the need for further development and promotion of small-scale businesses increased and, seeing the successful approaches adopted by BDP- EPU to promote new enterprises in Nepal, Ministry of Finance, HMG, and Federal Ministry of Economic Cooperation (BMZ), Germany, considered the creation of a project that would promote small businesses in Nepal. After bilateral negotiations and stud- ies, a decision was made and in October 1983 the Small Business Promotion Project (SBPP) was formed.
The goals and intentions of SBPP were outlined in advance and its contributions were to be significant. SBPP would work to promote and increase the number of independent micro-enterprises in the country through human resource development and proper utilization of raw materials. Since micro-enterprises play a major role in increasing per capita income and the GDP of Nepal, thousands of individuals would develop skills and contribute to the country's national growth by providing employment opportunities for others. (Recent studies show that Nepalese small and cottage industries account for 7.=% of GDP, 66% of exports, 85% of industrial employment, and represent 95% of the total number of industrial units). Special focus would be on the country's less developed regions. With the growth of small businesses, migration to urban areas would decrease and a sounder distribution of economic resources would be assured. Since lack of data on micro-businesses registered with the Ministry of Industry had made evaluation of their performances difficult, SBPP would organize research programs according to the needs of entrepreneurs and the market situation. Based on this information, it would evaluate the performances of small businesses and give constructive feedback to develop better marketing strategies and technical and management knowledge and skills. With a staff structure that could conduct surveys on district potential, it could encourage enterprise development through useful guidance and concretely contribute to a better growth and sustainability of enterprises in Nepal.
SBPP management was to be overseen by a project manager deputed by the Ministry of Industry and an advisory team from GTZ (Deutsche Gesellschaft fur Technische Zusammenarbeit GmbH, the German development agency) would also be a part of the decision-making process. So began the first phase of decade-long contribution of Small Business Promotion Project.
DEVELOPMENT
During Phase I, October 1983 to August 1986, SBPP opened its head office in Kathmandu. It deputed personnel from well-established organizations and created five branch offices in Bhaktapur, Butwal, Bhairawa, Dharan, and Pokhara. These offices worked on four main topics: New Business Creation, Small Business Consultancy, Complementary Credit, and Ceramics Promotion. Ceramics Promotion became, in 1986, an independent project called the Ceramics Promotion Project. During these years, SBPP worked to create able staff and to improve upon its services so they would best benefit the entrepreneur. Establishing a revolving fund in Agricultural Development Bank (ADB) helped entrepreneurs start or expand their enterprises. Since ADB is among the most wide-spread banks of Nepal, the credit is disbursed to rural areas: 80% of SBPP's focus.
Phase II, August 1986 to August 1989, saw the establishment of two more branch offices in Nepalgunj and Narayanghat. Technical Advisory Service and Research, Design, and Testing were added to the four core topics that the project highlighted. Linkages with other organizations and institutions engaged in similar activities were strengthened and while interacting with them, a new sector "Services to Institutions" was formed.
By the time SBPP reached Phase III, August 1989 to August 1992, many trainers prepared by the project were working to promote the small businessperson and to improve his/her management skills. Experience showed that the New Business Creation (NBC) approach worked well for target groups that had little education. The project, in joint collaboration with the Canadian Center for International Studies and Cooperation (CECI) started the Micro Enterprise Creation and Development Program to deliver the NBC package to the rural poor via local NGOs. At this time, the project's focus was to encourage Nepalese women to enter the business field. SBPP conducted three NBCs exclusively for women and formed an alliance with Developing Women Entrepreneurship in Tourism to facilitate this work.
TRAININGS HELD BY SBPP
Name | Number | Participants |
New Business Creation | 142 | 2,459 |
General Management Training | 54,916 | |
Accounts | 48,861 | |
Sales | 11,228 | |
Production management | 2 | 43 |
Marketing management | 15,289 | |
Financial management | 4,79 | |
Courses for trainers | 28,437 | |
Total | 304 | 5,303 |
Phase IV, August 1992 to August 1995, brought internal changes in SBPP. The focus was towards institutionalization. As long as SBPP remained a project, sustainability was not guaranteed. It was important, however, that the work being carried out by the project should be continued or even expanded by a more permanent institution. In order to assure a longer life to SBPP, a branch office was established in Kathmandu in mid-1992 and a Planning and Business Information Division was set up. Project decision-makers hoped to establish the organization as an autonomous non-profit institution working for the betterment of the small entrepreneur. The project constructed its main office in autumn 1994 and, by this time, possessed a significant amount of property that could be handed over to a more permanent organization. In view of its impending institutionalization, a greater focus was put into making the project self- reliant. A higher proportion of its operating costs were realized through training and services as demanded by the market.
Phase V, SBPP was institutionalized on July 3, 1995. The institution now has firm legal status and its main body is called Industrial Enterprise Development Center (IEDC). SBPP is now a joint project of IEDC and GTZ and the staff and the property have been passed on to the center. An executive board representing the Secretary of Ministry of Industry, Representative of Ministry of Finance, President of FNCCI, President of ANSCI, and Executive Director of IEDC has been formed. GTZ will continue to support its development efforts and His Majesty's Government will also grant full support. In this way, continuity of services to future and existing entrepreneurs has been assured. See the IEDC profile on the internet for more information.