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Nepal is one of the poorest nation in the world where 25.4% population lives below poverty line. Country is facing significant challenges in poverty reduction due to alarming population growth and lethargic nature of its economy. Its socio-economic condition is mainly characterized by agriculture with lack of employment opportunities. The role of skill development on poverty alleviation is crucial and it becomes very important especially for the countries like Nepal. To tackle the employment problem in Nepal, a number of skill development training centers under the Ministry of Labour have been operating with the objective of capacity building of the labour force. Still enormous mass of untrained and school dropout youths remain unemployed or under-employed due to the lack of specific skills as high level theoretical education does not pay off for skilled working hands at the practical level. In last five years, Nepal has not been able to create sufficient employment opportunitiesin comparison to the increasing population, has caused to look for foreign employment as a solution of problem. Skill Development Centers should formulate courses that meet foreign labour markets need.