UN MSME Day
This topic provides information about UN MSME Day.
The UN General Assembly in its 74th Plenary held on the 6th April, 2017 declared 27th June as Micro, Small and Medium-sized Enterprises Day, recognizing the importance of Micro, Small and Medium-sized Enterprises in achieving sustainable development goals and in promoting innovation, creativity and sustainable work for all.
Micro, Small and Medium-sized Enterprises
What is a micro-, small, or medium-sized enterprise?
The criteria for defining the size of a business differ from country to country. As a reference, the European Commission’s definition of micro-, small and medium-sized enterprises is established according to the number of employees and the annual turnover or balance sheet:
- micro-enterprise: fewer than 10 employees and an annual turnover (the amount of money taken in a particular period) or balance sheet (a statement of a company's assets and liabilities) below €2 million.
- small enterprise: fewer than 50 employees and an annual turnover or balance sheet below €10 million.
- medium-sized enterprise: fewer than 250 employees and annual turnover below €50 million or balance sheet below €43 million.
The choice of MSME definition could depend on many factors, such as business culture, the size of the country’s population, industry and the level of international economic integration.
According to the data provided by the International Council for Small Business (ICSB), formal and informal Micro-, Small and Medium-sized Enterprises (MSMEs) make up over 90% of all firms and account on average for 60-70% of total employment and 50% of GDP.
These enterprises, which generally employ fewer than 250 persons, are the backbone of most economies worldwide and play a key role in developing countries. These types of enterprises are responsible for significant employment and income generation opportunities across the world and have been identified as a major driver of poverty alleviation and development.
MSMEs tend to employ a larger share of the vulnerable sectors of the workforce, such as women, youth, and people from poorer households. MSMEs can even sometimes be the only source of employment in rural areas. As such, MSMEs as a group are the main income provider for the income distribution at the "base of the pyramid".
MSMEs should be the first responders to societal needs and provide the safety net for inclusiveness.
Theme for 2019 - Big Money for Small Business: Financing the SDGs
Although MSMEs generate the most new jobs, they face many challenges in day-to-day operations and to grow. Access to finance is often cited as one of the primary obstacles that affect MSMEs disproportionately. According to the World Bank, there are 200 to 245 million formal and informal enterprises that do not have a loan or overdraft, but are in need of one, or do have a loan but still find access to finance as a constraint. More than 90 percent are MSMEs.
Financing constraints are also magnified for informal firms, which tend to be small in size, and although often less productive than formal enterprises, contribute significantly to economic activity and employment. Informal firms are estimated to account for around 74 percent of all MSMEs in the world, and around 77 percent of all MSMEs in developing countries. Unregistered firms rely mostly on informal financing, which — although important in facilitating access to finance — is associated with lower firm growth and increased firm illegality.
A developed financial sector helps mobilize and allocate resources, and manage risks, contributing to private sector development. Finance helps economic growth, and in turn, job creation.
MSME Day 2019 is not only dedicated to raising awareness of the need for greater investment into small and mid-sized businesses in developing countries. It is also a celebration of the gigantic contribution, away from the spotlight, smaller companies make to the global economy.
With the goal of overcoming these challenges, the International Trade Center, United Nations’ entity, works in the internationalization of micro and SMEs. The center has launched its flagship report: "The SME Competitiveness Outlook 2019: Big money for small businesses." . To access the report, click here.
How they contribute to the achievement of the Sustainable Development Goals
Micro-, small and medium sized enterprises are vital in achieving the Sustainable Development Goals, in particular in promoting innovation, creativity and decent work for all.
Efforts to enhance access to finance for SMEs across key sectors of national economies are an important element of implementation of the Sustainable Development Goals (SDGs). SDG targets 8.3 and 9.3 call for enhancing the access of SMEs to financial services. In addition, SMEs are an important element in the implementation of SDG 8 (decent work and economic growth) and SDG 9 (industry, innovation and infrastructure.
Source : UN
Celebrations in India
The Ministry of Micro Small and Medium Enterprises organized an international convention on the theme "Indian MSMEs, Global Aspirations" in New Delhi to observe the International MSME Day. Further, as part of continued celebrations, the second edition of the International SME Convention 2019 is to be held from 28th - 29th June, 2019 .
100 SMEs selected by a jury from among 34011 nominations from across India are also being felicitated under the aegis of the 6th Annual India SME 100 Awards.
Source : MSME