This document discusses the impact of small and medium enterprise (SME) development on youth empowerment in Nepal. It first provides context on SMEs in Nepal, which comprise over 96% of total industry and generate 80% of employment. It then discusses various government programs and funds that support SME and youth entrepreneurship development. SME development is found to reduce poverty and brain drain while increasing employment and investment. However, SMEs face challenges including inadequate access to finance, infrastructure, markets and entrepreneurial skills. The document concludes that SMEs are essential for economic growth but their potential remains untapped due to poor policy implementation and financing.

1. The Impact of SMEs Development
on Youth Empowerment in Nepal

2. Group Members
• Arogya Joshi
• Erika Shakya
• Ghanashyam Pokharel
• Karna Bahadur Lama

3. Table of Contents
1. SMEs Development in Nepal: A Contextual Exposition
2. Funding Windows for SMEs
3. Government Activities to SMEs Development & Youth
Empowerment
4. Impact of SMEs Development on Youth Empowerment
5. SMEs Contribution to Economics Development
6. Problems & Challenges of SMEs & Youth Empowerment
7. Conclusion

4. SMEs Development in Nepal: A
Contextual Exposition
• In Nepal, a small-sized enterprise is a company with fewer
than 50 employees (<30 million rupees), while a medium-
sized enterprise is one with fewer than 250 employees (30-
100million).
• SMEs are usually small own or family managed business with
its goods and services being basic.
• SMEs also tend to lack the organization and management
structure, which characterize large-scale entrepreneur (LSE).
• Urban SMEs tend to be more structured than their rural
counterpart.
• SMEs comprise a substantial part of the economic activity of
developing countries.

5. 1980s; Nepal has shifted to an open market regime
2001; 96% SME of Total Industry,80% Employment
Generation, 80% share on GDP of Total Industry
Tenth National Development Plan (2002-2007); MSE
development has been cited as an important development
strategy
Public and private sectors and cooperatives; three pillars of
development
2009 BS; Establishment of “Youth and Small Entrepreneur
Self-employed Fund”

6. 8052
8421 458 703 463 850 853 1568 1670
61379
5216
8230
13074 13174 13808
17155 17496 19226
0
10000
20000
30000
40000
50000
60000
70000
AxisTitle
Cottage and Small Enterprises in Nepal
Cottage
Small
(Source:http://www.dcsi.gov.np)

7. Funding Windows for SMEs
Family and Relatives
Financial Institutions
International Agencies
Government Financing

8. Government Activities to SMEs
Development & Youth Empowerment
 Establishment of “Youth and Small Enterprise Self-employed
Fund” in 2009 BS.
 Creation of “Employment Fund” with the joint co-operation
between Swiss Agency for Development and Co-operation,
UKAID, WB & GON.
 Establishment of MEDEP in 2001 with collaboration of UNDP
 “Woman Entrepreneurship Development Fund” which recently
offers the credit from Rs.100,000 to 500,000.

9. Impact of SMEs Development on
Youth Empowerment
• Poverty reduction
• Decrease in brain drain
• Increase in employment
• Investment friendly environment in the country
• Concept of self-reliant

10. SMEs Contribution to Economic
Development
 Economic transformation and poverty alleviation
 Capacity Formation
 Technological/Industrial Development
 Promoting Growth
 Industrial Dispersal
 Backward and Forward Linkages
 Technological Acquisition

11. Entrepreneurs and Employment
1957 4289
14163
18740 19779
63304
36624
16590
68018
72918 73443
36222
38664
0
10000
20000
30000
40000
50000
60000
70000
80000
2007/082008/092009/102010/112011/122012/132013/14
Entrepreneur
Employment
(Source:http://www.dcsi.gov.np)
Employment Generation

12. Problems & Challenges of SMEs &
Youth Empowerment
 Inadequate Access to Finance Capital
 Inadequate Infrastructural Base
 Inadequate Information Base
 Low Entrepreneurial Skills
 Poor Policy Implementation
 Lack of access to capital
 Insufficient quality and quantity of products and
 Lack of access to local and international markets

13. Conclusion
 There is no doubt that small and medium scale enterprises are
essential for rapid and sustained economic growth and
development.
 Most of the Nepalese SMEs are involved in processing and
manufacturing of food items, consumer and household goods,
and textiles and related products, both for exports as well as
the domestic market.
 The potentials of SMEs have not been fully harnessed due to
poor implementation of the seemingly promising policies and
inadequate financing of the SME.

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