The Micro-enterprise Development Programme (MEDEP) was started as a Government of Nepal and UNDP initiative to improve the socio-economic status of low income families in 1998. The programme was initially initiated in 10 districts covering two districts each in the country's five development region. As part of the programme objective, the programme was successful in establishing 6,690 micro-enterprises by December 2003, exceeding its target by 690 enterprises.

The programme was extended to a second phase based on its outstanding record and performance to address poverty through the development of micro-enterprises in rural areas. The project was then extended to addition ten districts for the period 2004 – 2007 (including one year no-cost extension) where in addition to UNDP, DFID, AusAID, and New Zealand AID supported as the donor agencies. In the second phase two more districts were added with AusAID component where one district overlapped with the existing district portfolio. In mid 2007, UNDP gave it the responsibility to implement enterprise development in six Terai districts ‘Quick Impact and Peace Support Initiative” (QIPSI), which is being executed despite facing enormous difficulties mainly due to exogenous factors. During the second phase MEDEP had 25 working districts by March of 2008. During this phase MEDEP achieved 22860 against 20440 targets.

MEDEP developed 29550 entrepreneurs against 26440 and generated employment opportunities to some 33080 persons during its first and second operation time period. Pursuant to its goals and objectives, MEDEP has also made efforts to improve the policy environment for the efficient and the effective operation of the micro enterprises. As a result, the Micro Enterprise Policy 2064 has been approved by the Cabinet on 2065/1/22 or 4 May 2008. With the technical assistance of MEDEP, Pine Plantation Thinning Guidelines was developed and approved by the Cabinet on 2064/4/27 or 11 July 2007.

With this all great achievement, MEDEP has been extended to a Third Phase from April 2008 to December 2010. MEDEP has started its Third Phase in its new six districts – Jumla, Kalikot, Dailekh, Surkhet, Baglung and Dolakha in 2008 including previous 25 districts.