Small & Medium Enterprises

SME (Definition):

Over 50 definitions of SME are used in 75 countries.

The definitions are based on two things

1. Labor (Number Employed)

2. Capital (Paid up)

By UNIDO 1989:

Micro Enterprises в†' In which there are up to 4 workers and going up to 9 workers.

Small Enterprises в†' In which there are 5-19 workers or 10-20 workers

Medium Enterprise в†' In which there are 2- 99 workers.

Large Enterprises в†' In which there are above 100 workers.

Micro Enterprises:

A small income generating unit, mostly family based and family workers income sharing and work sharing unit (main worker is for entrepreneur).

SMEDA (2007) Policy Document:

All the enterprises having up to 250 workers paid up capital and annual sales of Rs 250 million.

Importance of Micro Enterprises:

In less developed countries (LDC’s)

1. Continuing existence

2. Contribution to manufacturing employment

Two Types of Enterprises:-

1. Manufacturing Enterprises

2. Non-Manufacturing Enterprises

ILO:

пÑ"Ё ILO is main contributor to the discussion of microfinance.

пÑ"Ё They published many papers during (1970’s, 1980’s and 1990’s)

пÑ"Ё They indicated that in the area of LDC’s micro enterprise sector is most important.

пÑ"Ё As micro enterprises are there for longer time but it is not graduating

пÑ"Ё So for government policy incitation is required.

Reasons for Failure:

(Why micro enterprises could not graduate)

1. Lack of Vision

2. Lack of Management

3. Lack of Government