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Small and Medium Enterprises not only providing the employment to the major chunck of the population but also analyse/conduct research how to support the country economy in terms of business development with the help of small segments of business units.
Intense competition and the gap between rich and poor
· Small & medium enterprises are the back bone of any3rd world economy. Even the big multinationals outsource some of their products and services like ,packaging, transport, private security etc from SMEs.
· In India we have the handloom and the handicraft sector which use nominal electric power and use maximum labour has the protection of the government.
· The bidi (traditional cigarette ) industry in India and Bangladesh is wholly operated by SMEs. The EXPORT oriented garment industry in Bangladesh and many of the BPO firms in Indian metros are operated by SMEs. The whole road transport business in India and Pakistan is owned by SMEs. And they compete favorably with railways which is owned by the government.
· In short SMEs would continue to be provider of economical, products and services to multinationals and others in areas where big firms would not venture due to lower profits and government regulations.
· But there is a criticism. Some firms to get the benefits like concessional loans and lower rates of taxation never grow big. They remain SMEs.
SMEs are back bone of economy and add value to economic development of scociety. The real strength of economy is measured through flow of capital in SME sector.
SME = Small & Medium Entripriese. Compared to large corporates, it is the SME sector that actually employs a major chunck of people.
The investment ranges for these are defined.Small and Medium Enterprises.As involving small to medium investments have tremendous potential to generate employment..So all countries are started encourage SMEs. from social angle.
What is SME and why it has become so popular segment these days?
Due to the physical problems of the successive in most countries
Banks went to care for lending to micro-enterprises and medium-sized
Which led to the transformation of a large development in several countries
Achieved more work opportunities and at the lowest cost and increased commodity supply
And eased the load on developing countries
SME or small and medium enterprises are the middlemen or the link between the larger companies who need to outsource portions of their business eg manufacturing, ccustomer satisfaction etc. to reduce Overhead costs, and the population who are employed by the SME's to fulfill the needs. If SME were not there or were a very small segment then there would have been an economic imbalance which would result in lesser jobs for the general population and higher costs for the large companies.
SME Small and Medium enterprises are those enterprises which not only contribute to the economy of the country but provide employment. These are small scale industries, be it manufacturing or services sector. These units by and large are input providing units to the large or very large enterprises. In the modern day banking after accepting BASLE norms the SME sector is the target area for investment as the risk is spread over many units unlike funds getting struck in large or very large enterprises.
