In India SME categorisation is given below:

Manufacturing Sector

Micro Enterprises:  Does not exceed twenty five lakh rupees

Small Enterprises:  More than twenty five lakh rupees but does not exceed five crore rupees

Medium Enterprises:  More than five crore rupees but does not exceed ten  crore rupees

Service Sector

Micro Enterprises: Does not exceed ten lakh rupees:

Small Enterprises: More than  ten lakh rupees but does not exceed two crore rupees

Medium Enterprises: More than two crore rupees but does not exceed five core rupees

Hi Sofia,

I am sure you are in agreement that there is a need for a global/international benchmark to enable researchers to make comparisons between different countries/economies.

At a local level, banks and other agencies would require more financial details especially regarding making loans to these enterprises.

What criteria do you propose?

Below is the OCED's view:

Small and medium-sized enterprises (SMEs)

 Small and medium-sized enterprises (SMEs) are non-subsidiary, independent firms which employ fewer than a given number of employees. This number varies across countries. The most frequent upper limit designating an SME is 250 employees, as in the European Union. However, some countries set the limit at 200 employees, while the United States considers SMEs to include firms with fewer than 500 employees.

Small firms are generally those with fewer than 50 employees, while micro-enterprises have at most 10, or in some cases 5, workers.

Financial assets are also used to define SMEs. In the European Union, a new definition came into force on 1 January 2005 applying to all Community acts and funding programmes as well as in the field of State aid where SMEs can be granted higher intensity of national and regional aid than large companies. The new definition provides for an increase in the financial ceilings: the turnover of medium-sized enterprises (50-249 employees) should not exceed EUR 50 million; that of small enterprises (10-49 employees) should not exceed EUR 10 million while that of micro firms (less than 10 employees) should not exceed EUR 2 million. Alternatively, balance sheets for medium, small and micro enterprises should not exceed EUR 43 million, EUR 10 million and EUR 2 million, respectively.

Source: OECD, 2005, OECD SME and Entrepreneurship Outlook: 2005, OECD Paris, page 17.

Regards

Rob

Hi Robert 

Thank you so much for your answer.

Actually, after doing some reading I observe that most of the definitions based on the qualitative variables. But, for example, In Morocco  we can find a lot of enterprises with an employee's number less than 5 or 10 but a turnover more than 10 million euro  so in this case this definition is not available.

Maybe the definition as it was taken is false in this cases  may be it's important to include some qualitative variable to make it more adaptable in some developing countries like Morocco 

Regards 

Sofia

I think you would have to contextualize definition to the country context, similar to how Ritesh had highlighted for India

Yes I need to think about this.  Thank you for your answer 

Thank you so much Robert

Hi Sofia

Before 2005 it was only based on employees. The sector in which the enterprise operates in, doesn't determine it's definition(Europe), unlike the example Ritesh (in India) gave?

However by your example, an independent micro enterprise ( 0-9 employees) and income over EUR 2 million falls outside the criteria. Although through my research I haven't come across this issue

The attached paper could be of help how the Moroccan criteria as evolved or the World Bank paper s.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/08/14/000445729_20130814125924/Rendered/PDF/802450BRI0Fian0Box0379802B00PUBLIC0.pdf

If each country had its own definition (and their criteria/spectrum varied widely, be it the number of employees or value turnover) then it would be almost impossible to do any comparison/research between them, although by Seervas there could be some local leeway however I would maintain that changes could only be made in only one of the areas highlighted above.

Your thought's?

Rob

Sorry about the double answer having problems uploading to Researchgate site

Sofia,

This paper may offer some insights from the emerging country perspective.

https://www.researchgate.net/publication/299747565_Towards_a_talent-driven_outward-oriented_globally-competitive_SME_framework_Discussion_Paper

Technical Report Towards a talent-driven outward-oriented globally-competitiv...

Hi,

If you can download the above paper? it does add to qual and quant argument.

Rob

Hi 

I can not download it. I'm waiting for M.Silburn Clarke to send it to me so I can read it 

Sofia

Hi

I had to read it on-line!

Rob

Hello 

Ok i will thank you 

Sofia

There are many ways 

1 . the number of people employed

2. the turnover of the business

3 the investment in plant and machinery

Dear Sofia,

Following Mohsin's comment, there are many criteria and thresholds that should be simultaneously taken into account (See the definition from the European Economic Commission in 2005, as well as that from the World Bank Enterprise Surveys):

the number of employees and gross sales turnover as well as value-added.

Of course, it depends on the availability of data, which will be missing for informal SMEs. This is especially the case of microenterprises (less than 10 employees) that are included in the household sector, according to National Accounts (mostly family businesses).

It also depends on the regulation ruling the registration of SMEs in a given country

As for those registered SMEs, it is relevant for analytical purposes to sort out their corporate governance (full private ownership, family business or if they belong to a group e.g. as subsidiairies) and what is their capital structure.

Best

Philippe