Incense making enterprise sees huge success......

Youths find a reason to stay back home….
Women engaged in making incense sticks. Photo: UNDP Nepal

Nepal imports huge quantity of incense- sticks. The market of incense sticks is estimated close to Rs. 1 billion per year and the domestic production constitutes of less than 50 percent—indicating a big scope for expansion of incense making enterprise in the country.

Although the process of making incense stick is fairly simple, the rural Nepali micro-entrepreneurs did not have any knowledge about the technology until very late. One of the main ingredients used in incense making is the resin based binder obtained from the bark of Kaulo or Michilus Odoratissima tree. Kaulo is abundantly available in the Mahabharat range of Nepal between the altitudes of 900-1300 meters. Kaulo trees, 40 to 60 feet tall with the girth of 6 feet can yield more than 12 kgs of dried bark at a time for industrial processing.


  • Since it began, MEDEP has developed over 32,000 micro-entrepreneurs (68% women, 20% Dalits and 67% youth) and created about 37,000 sustainable jobs.
  • The success of MEDEP has let the government to allocate substantial funding to the local government bodies ($3 million in fiscal year 2010/11) to implement the MEDEP model in 45 districts under its new Micro-enterprise Development for Poverty Alleviation Scheme. The government plans to replicate the MEDEP model in all 75 districts of Nepal in five years time

Thanks to the UNDP Micro Enterprise Development Programme (MEDEP) that the communities received a good amount of support to conduct a research for identifying the raw materials and discovering the local technology for producing incense sticks for the first time in Nepal. The raw materials required for incense production are locally available—bamboo sticks, Kaulo, charcoal dust, imported chemicals— DEP (Diethyl Phthalate), White Oil and the Scents.

When the micro-entrepreneurs discovered the usage of ‘Kaulo bark’, they started making the incense sticks themselves. As a result, the home production has to some extent helped to substitute the import of incense sticks from India.  In 2008-2009 alone, incense sticks worth US$ 234,000 were exported from Nepal to more than 17 countries including India. Kaulo harvested from forests is still being exported to India in an unprocessed form.

There are more than 1,000 micro-entrepreneurs promoted by MEDEP in incense production. The total number of people engaged in incense production is around 5,000 in the country. Most of them have replicated the enterprise from the MEDEP entrepreneurs.

After the Government of Nepal came up with the Micro enterprise Policy 2007 to facilitate the growth of micro-entrepreneurs, MEDEP robustly involved itself in improving the livelihood of poor families through skill development trainings.

An incense entrepreneur in Sindhuli employs 52 women workers and most of them are trained by MEDEP. Their average income per day is Rs. 140-175 with 4-5 kgs of production. Likewise, the incense stick enterprise in Bhuchakrapur, Dhanusha district is giving employment to more than 500 people. In Biratnagar alone, 46 registered incense manufacturing units are in operation, some of them producing 40-60 kgs of incense sticks on a daily basis providing employment to 15-25 people.

The incense enterprises have also initiated other small enterprises of making bamboo sticks for making incense. These are mostly women entrepreneurs who produce the sticks as a part time job after they finish their daily household chores. Several families are running the enterprise, earning an average profit of Rs. 5,000 per month by making sticks for incense.

With regard to the contribution of MEDEP to the Millennium Development Goals(Goal # 1- Eradicate Extreme Poverty and Hunger), the independent survey conducted in 2011 shows that nearly three fourth of the participants/households have moved out of the poverty (73.1%).

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