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SMESME

Definitions of SMEsDefinitions of SMEs

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Category Micro-enterprise Small enterprise Medium enterprise

Manufacturing, Manufacturing-Related Services and Agro-based industries

Sales turnover of less than RM250,000 OR full time employees less than 5

Sales turnover between RM250,000 and less than RM10 million OR full time employees between 5 and 50

Sales turnover between RM10 million and RM25 million OR full time employees between 51 and 150

Services, Primary Agriculture and Information & Communication Technology (ICT)

Sales turnover of less than RM200,000 OR full time employees less than 5

Sales turnover between RM200,000 and less than RM1 million OR full time employees between 5 and 19

Sales turnover between RM1 million and RM5 million OR full time employees between 20 and 50

Unique Features of SMEsUnique Features of SMEs

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have an owner/manager with few generic business skills or a particular technical expertise

have personal assets committed as security for the business

operate flexibly rather than on a strict observance of regulations

have a vision and outlook that is bounded by the skills and experience of the founder/owner and tight resource constraints

operate in provincial areas, be a key part of the social fabric of the community

Importance of SMEsImportance of SMEs

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The significance of SMEs is associated primarily with their role in stimulating economic growth.

Other significant contributions of SMEs: Because they are labour-intensive, SMEs create

employment opportunities. SMEs enhance regional development and create

more equitable income distribution due to their location and ongoing expansion throughout the broader community.

Importance of SMEs Importance of SMEs

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SMEs play a vital complementary role in relation to larger firms--as suppliers and distributors.

SMEs serve as a training ground for developing the skills of workers and entrepreneurs.

The presence of SMEs curbs the monopoly power of larger firms and provides the structure of the economy with greater flexibility.

Thus, a country can reduce its vulnerability to financial crises by strengthening its SMEs.

Some Facts and FiguresSome Facts and Figures

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A total of 90.2% of all manufacturing and service businesses are SMEs and the majority of SMEs (86.6%) are in the services sector.

Employment- SMEs accounted for 56.4% of the total workforce.

GDP-SMEs contributed 33% of the total output.

Total Export-SMEs contributed 19%.

(Ref: SMIDEC 2009)