Supporting Small Enterprises: Generating Jobs Through Processing Local Resources

Banana paper and essential oils

Over the past few decades, Nepal has become a reservoir of cheap labor for many countries – with all the opportunities and drawbacks that entails for Nepalese society. A project to promote technological innovation and micro-enterprise is helping to establish micro-entrepreneurship in Nepal, and showing that investing in a little business is a sensible use of the money sent home by family members working abroad.

Of the well over 400,000 young people entering Nepal’s job market every year, 100,000 leave the country to look for work in Malaysia or the Gulf States, where they are all too often exploited on construction sites and in private households. Their remittances, however, go to make up more than 30% of Nepal’s gross national product (GNP). In fact, labor migration has raised hundreds of thousands of families out of poverty. They build themselves a house, purchase consumer durable goods or send their children to private schools. The effects of these remittances on the domestic job market, however, are minimal.

This Helvetas project helps socially disadvantaged young people become micro-entrepreneurs themselves: they now distill peppermint, eucalyptus or lemongrass into essential oils, or turn banana tree trunks into paper and yarn, charcoal dust into burnable pellets. They make unfired mudbricks more durable by adding cement.

They learn not only how to make new products, but also the basics of entrepreneurship: how to draw up a business plan, keep the books, reinvest profits. The goal is for families to invest some of the remitted money in micro-enterprises. That way, the earnings from labor migration help to improve the domestic labor market, for these newly created micro-enterprises are also creating new jobs at home.